International investors across EMEA represented nearly 35% of transactional activity in the first quarter of 2011, up from 31% in the final quarter of last year, according to new data released by C&W.

Foreign buyers were an important source of added demand in a number of countries which bucked the downward trend in activity between Q4 and Q1, including Belgium, the Czech Republic and the Ukraine amongst others. Domestic buyers are growing more competitive in a number of other areas however, which bodes well for greater activity over the coming months.

During the first three months of 2011, European commercial property investment activity hit EUR 28.5 bn, 45% up on the opening period of last year. However, activity was down 30.5% on Q4 2010 which was the strongest quarter since Q1 2008 as investors felt under real pressure to close deals before the year end.

Michael Rhydderch, head of the European Capital Markets Group at C&W, expects the market to get busier in the months ahead due to an expected increasing amount of bank controlled or bank-forced sales.

The big winner in the market at the moment has been the retail sector, which saw a 72% increase on the same quarter of 2010. The EUR 12.1 bn invested represented 42.5% of market activity versus just 33% in the final quarter of last year. At the same time offices saw a 50% fall in activity over the last two quarters, taking a relatively low 34% market share, while industrial picked up to nearly 12% from just 8% last year as higher yields and a recovering manufacturing market brought more investors forward.