Property consultants CB Richard Ellis said on Thursday that despite a slower fourth quarter total investment turnover in European commercial real estate came in at an estimated EUR 236 bn in 2007, compared with the EUR 230 bn in 2006.

Property consultants CB Richard Ellis said on Thursday that despite a slower fourth quarter total investment turnover in European commercial real estate came in at an estimated EUR 236 bn in 2007, compared with the EUR 230 bn in 2006.

Turnover in the fourth quarter totalled EUR 47.2 bn, a third less than in the same period of 2006. The UK accounted for the bulk of the decline in investment activity, while investment levels elsewhere in Europe were relatively stable. Austria, the Netherlands and Spain all saw markedly higher levels of activity in the final quarter of 2007.

Most European markets showed a year-on-year increase in turnover, with significant growth coming from France, Germany and the Netherlands, partly offset by lower activity in the UK, Ireland, Poland and Sweden, CB RE said.

The higher than average growth in turnover in two of Europe's largest markets over the last few years - namely, France and Germany - has significantly changed the European investment landscape. In 2004, the UK market accounted for over 50% of the region's investment turnover. In 2007, the UK was still the largest European market, representing 30% of the total; however the size of the markets in both Germany and France grew much faster than the average over that time and between them they now represent approximately 36% of the European total.

Jonathan Hull, director of EMEA Capital Markets at CB RE said: 'The UK market is the most mature and transparent market in the region and has felt the correction in pricing in response to credit constraints, resulting in the expected decline in investment activity in Q4 2007.The relatively small reduction in activity outside the UK illustrates continued support for many continental European markets. Lower interest rates and significant pools of equity will support transactional demand in 2008, although investors will become more selective and more cautious in their pricing of risk.'

CB RE's EMEA Research Director Michael Haddock added: 'Looking forward, the impact of the credit squeeze on investment turnover is likely to continue into the first half of 2008. Despite the expected fall in activity between 2007 and 2008, equity-rich investors such as the German open-ended funds and sovereign wealth funds are expected to support market activity in Europe this year.'