France and Italy experienced the strongest quarter-on-quarter growth as European real estate investment increased in the third quarter of 2011. The total value of commercial real estate investment in Europe in Q3 2011 was EUR 26.3 bn, representing a slight (2%) increase on the EUR 25.8 bn recorded in Q2 and a 7% increase on the EUR 24.5 bn in Q3 2010.

Commenting on its latest data, CB Richard Ellis said the increase was in sharp contrast with the volatility in other asset classes over the same period. Commercial property, CBRE said, benefited from the stability of capital values and continued investor interest.

The European property investment markets that showed the strongest growth, quarter-on-quarter, were Italy (+69%) and France (+42%).

In the case of Italy, this sharp increase can be traced to a low level of investment activity in Q2 and one or two large deals completing in Q3 to swell the quarterly total. In France, there has been an increasing amount of property coming to market in Paris which has helped to increase transaction levels.

Looking at the longer-term trends, the Central and Eastern Europe (CEE) region stands out as the fastest growing European real estate investment market so far in 2011, according to CBRE. The year-to-date property investment stood at EUR 8 bn at the end of Q3, which compares to a total for the whole of 2010 of just EUR 5.1 bn. Most CEE markets have reported increasing activity, but investment remains concentrated in the core CEE countries (Poland, Czech Republic and Hungary), as well as in a resurgent Russian market.

In Western Europe, Belgium, Germany and Sweden are also showing strong year-on-year growth.

Jonathan Hull, Head of EMEA Capital Markets, CBRE, commented: ' The last quarter has reinforced some of the earlier trends seen in Europe over the last year or so, such as that prime real estate is holding up fairly well, even in the current uncertain climate. However, we are seeing weakness in secondary markets. On a more positive note, with EUR 81 bn of investment activity reported in the market in the first three quarters of the year, we expect European investment turnover to exceed that in 2010, when EUR 110 bn was transacted for the full year.'