Direct investment in European commercial real estate reached €12bn in Europe in Q1 2009, down -30% on volumes in the previous quarter and -70% lower than Q1 2008, according to new research from Jones Lang LaSalle.

Core Western European markets accounted for 95% of total investment volumes, whilst Central and Eastern European markets saw very little activity.

Tony Horrell, head of European capital markets at Jones Lang LaSalle, said: “In the first quarter of 2009 we have noted improving sentiment and increased bidding and in the last three months we have seen investors seeking high quality and long term good income.

However there is a lack of good prime product and at the same time the accepted definition of the prime asset class has narrowed considerably.

“Whilst yields in some markets moved out marginally in the last quarter, yields in many markets remained stable, for example in the City of London, Amsterdam, Frankfurt, Hamburg, Munich and Paris. This genuine interest from some investors is a positive sign but only time will tell if key deals will sign in the coming months.”