Parts of Continental Europe are close behind the UK and some Asian countries that are poised to lead the way to recovery in commercial real estate, according to ING Real Estate Investment Management’s annual global research study.

Parts of Continental Europe are close behind the UK and some Asian countries that are poised to lead the way to recovery in commercial real estate, according to ING Real Estate Investment Management’s annual global research study.

The study, which was presented to journalists in London on Monday, indicates that large flows of capital into commercial real estate globally, attracted by depressed pricing, are helping to stabilise major markets.

Tim Bellman, global head of research and strategy at ING REIM said: 'In the UK and in key markets in Asia, excluding Japan, the point of take-off seems to have been reached.'

Bellman said major Continental European markets such as Germany and France, as well as Australia, were also nearing this point. 'But the US is weighed down by the volume of its real estate debt and is still stuck on the launch pad for the time being.'

The ING study suggests that expectations in the real estate capital markets and property fundamentals are diverging, at least in the short term. Optimism in parts of the capital or investment markets is not yet being matched by improvement in the underlying occupational demand for working space.

ING REIM cautioned that the rebound in investment interest in real estate - with investment volumes rising significantly in Q3 and Q4 this year - was to some extent fuelled by liquidity, due to the lack of alternative high-yielding investment opportunities.

Bellman: 'We expect that weak and fragile economic growth worldwide over the next few years is likely to lead to a generally jobless recovery with commercial real estate demand correspondingly remaining subdued for an extended period.'

Bellman said a lot depended on the banks. ‘If the banks also decide not to refinance real estate debt as it falls due, or they choose to tackle their mounting volumes of non-performing loans backed by property collateral, then there is the prospect of distressed assets coming on the market in increasing numbers and choking off the emerging recovery’.