Property fund manager Aviiid Third-Age Living Investment Management has delayed the launch of its aged care property fund, after a lack of distressed sales in the Australian market prolonged the negotiations on assets it had set its sights on.

Aviiid was due to launch its first fund, the Australian Fund No. 1, in April this year. However, it is now more likely to take place in the third quarter of this year.

"Late last year, we were in discussions with asset sellers and we thought the phones would be ringing off the hook with distressed sellers - that didn't happen," Aviiid managing director Scott Marinchek said.

"There have been no major portfolio sales of retirement assets," he said.

Marinchek said prices had not dropped as far as expected because banks did not call in their loans based on the hope property managers would be able to pick themselves up after the global financial crisis.

"Basically, it just means we couldn't get the price we wanted," he said.

But Marinchek said negotiations on the assets he was eyeing have not been broken off.

"A number of vendors haven't left their stasis yet. They are still waiting to see what will happen," he said.

The Aviiid Australian Fund No.1 will be a closed-end unlisted property fund, which will invest for at least 90 per cent in senior housing and aged care facilities.

Aviiid is also looking to establish an aged care infrastructure fund by the end of 2011, followed by an Asian fund in 2012.