Commercial property investment opportunities are moving outside core markets in Europe, according to property adviser DTZ. European property markets now offer relatively less attractive returns to investors than they did in Q3 2010, with the latest European all-property DTZ Fair Value Index Q4 2010 standing at 40, a decline from 55 in Q3.

The DTZ Fair Value Index, which measures the attractiveness of commercial real estate markets around the world, also shows that Europe has fallen in the global rankings with the Global Fair Value Index standing at 53.

Many core markets around Europe are currently providing less value to investors as pricing has now adjusted to reflect the recovery underway in these markets. Whilst the majority of markets are either 'hot' or 'warm' there are less clear cut opportunities.

However, developing European markets such as Prague and Moscow now present attractive buying opportunities as following aggressive price correction, investors are able to benefit from strong growth potential. Additionally, Germany is outperforming other European markets. It is the only country with an improved overall score in Q4. Stronger economic performance in Germany is feeding through to the occupier market.

Across Europe the number of 'hot' markets has decreased to 14 in Q4 from 23 in Q3, whilst the number of 'cold' markets has increased to 34 from 14. The majority of markets remain in the 'warm' category. London City and London West End offices have been reclassified from 'hot' to 'warm' as yields compress and the forecast strong rental growth materialises. Paris CBD offices move from 'warm' to just 'cold' for a similar reason. All three markets still have plenty of rental growth to come but this is now priced in.