Real estate deals in Europe have plunged this year compared to 2008, according to Jones Lang LaSalle.
The property services firm said direct investment transactions reached only €70 billion in the past 12 months, 40 percent down on the same period last year.
However, there is some encouragement the deals market is strengthening, with volumes climbing in each of the last three months. The fourth quarter will see the greatest volume for the year, it added, with almost €25 billion transacted.
Chris Staveley, director of the firm's European capital markets team, said European real estate investment markets had now passed the lowest point of one of the worst economic downturns ever.
“In 2010 we expect further increases in transactional activity of up to 20 percent on 2009 levels, taking us to around €85 billion next year assuming no further significant economic shocks.”
The UK remains the most active market in the region with London leading competition for assets. The second largest market, dominated by domestic institutions, is Germany.
Nigel Roberts, chairman European research, stressed though a lack of quality product “meant a significant amount of capital remains frustrated. In some markets … this has led to the hardening of yields.”