REAL ESTATE - The European commercial real estate market has doubled over the past two years, According to a CB Richard Ellis report just published, turnover increased 46% last year to €227bn, following an increase of 47% the previous year.

In some markets, the figure was significantly higher. German investment deals saw a 150% year-on-year increase in 2006 to €51bn. Regional turnover in central and eastern Europe increased from €5.8bn to €12.7bn in 2006.

Cross-border investment rose 70% to €100bn in 2006, with almost half of deals involving an overseas buyer. Some of this demand has come from consistent interest from US investors, who spent €21.5bn and accounted for around 30% of acquisitions and sales. However, Australian investors ploughed €5bn into property in the UK and Germany.

Among Europeans, Britons were the most active European cross-border investors. Last year they accounted for acquisitions worth €14.6bn. Otherwise, intra-Euro-zone cross-border investment lagged, accounting for €15bn of a total €60bn investment.

A spokesman for the firm said the upward trend in cross-border investment represented "a levelling up of market liquidity" to UK and Swedish standards. Yet the report argued that the "huge gap between the most liquid markets in Europe and the least" indicated potential for turnover to "get substantially bigger before any sort of structural limits are reached".

The report follows a deal report published last month by Sireo Research, based on the firm’s database of more than 1,300 transactions in 25 markets, that valued the European property market at €6trn.

The report claimed that, across Europe, the establishment of real estate as an independent asset class and the sector’s closer linkage with capital markets in need of investment products had driven the consistently high volume of portfolio transactions.