According to Jones Lang LaSalle, direct investment in commercial real estate in Europe stood at €24bn in the first half of 2009.

Levels in the second quarter were similar to volumes seen in the first quarter of the year. The €24bn transacted in direct commercial real estate investment in the first half of this year was down -42% on the second half of 2008 (€41.5bn).

Tony Horrell, head of European capital markets at Jones Lang LaSalle, said: “We believe that the European market has now reached a floor in transaction volumes and based upon investor interest we would expect an increase in turnover in the second half of this year. Prime office yields were largely stable in Q2 for the first time since mid 2007. Volumes have remained low because the bid offer spread remains wide in some markets due to price expectations and needs of owners. At the same time falls in capital values have made pricing attractive for those investors with equity or buyers who are not highly leveraged and who have good banking relationships.

“It is the high net worth individuals and equity players who are making the market at the moment, as the debt markets remain largely restricted; new lending remains tightly constrained and expensive and most large deals have vendor financing or stapled debt. There is no shortage of equity for income secure opportunities. We are seeing deep investor interest in London, with multiple bidding from international investors, some of whom continue to benefit from currency advantage.”