London recorded the highest-ever annual volumes seen in Europe for a single city in 2013, cementing its position as the region’s number one investment destination, according to new research from CBRE.

London recorded the highest-ever annual volumes seen in Europe for a single city in 2013, cementing its position as the region’s number one investment destination, according to new research from CBRE.

On a quarterly basis, investment in London increased every quarter last year with Q4 2013 up 73% on Q3 2013, according to the adviser.

In total, the UK capital captured over 23% of the European market with €32.2 bn worth of transactions in 2013. This is the second consecutive year of strong growth in investment activity with year-on-year increases of 45% (2011 to 2012) and 43% (2012 to 2013).

Europe as a region saw commercial real estate investment volume reach €165.6 bn last year, an increase of 30% on the previous year’s total.

The Q4 2013 total of nearly €61 bn was the highest quarterly figure recorded on the old Continent since Q4 2007.

'London had a phenomenal year with the total value of investment reaching pre-global financial crisis levels,' said Simon Barrowcliff, Executive Director, Central London Capital Markets, CBRE. 'Looking forward to 2014, it is unlikely that the market will repeat this performance. Although cross-border investor demand, particularly from Asia, is getting even stronger, there are constraints on the supply side that will probably limit investment activity.'

Germany continues to perform well with five cities featuring in CBRE’s top ten of European investment markets. Last year investment in Germany as a whole had a strong domestic component. Despite improvements in other European economies, German investors continue to be strongly focused on their home market, CBRE noted. Each of the five saw local investors take more than a 50% share and in Hamburg nearly 85% of capital invested in 2013 came from local buyers.

Paris again occupies second place, with over €11 bn of commercial real estate investment activity. However, by comparison with other top cities 2013 was a flat year for the Paris market with total investment falling by 8% year-on-year compared to significant increases in most of the other top ten markets.