UK real estate prices rose 26% over 12 months, boosting the European average, according to a transaction-based index.

Prices for all European commercial real estate grew 16% in the 12 months leading up to the end of March, a report by DTZ showed.

DTZ’s European transaction-based price index, launched last year, measures price movement based on actual sales.

It showed that UK markets outside London show the largest price movements and the strongest increase in investment activity, rising 27% over the period.

Although lagging behind the UK, growth on the continent is now accelerating, DTZ said, with prices 10% higher than a year ago – the strongest recovery since 2010.

Nigel Almond, head of capital markets research at DTZ, said investment is broadening, with more activity away from major cities in France and Germany.

Price increases have been driven by increasing demand for assets as investors find it difficult to secure prime property. Another factor has been investment activity moving beyond core markets.

The proportion of continental European sales in France and Germany fell to 58% in the year to the end of the first quarter of this year from 67% in the preceding year.

Almond said that, despite rapid increases regionally, the index for the UK excluding London is more than 20% below the peak of the market in 2007.

“That indicates that there remains potential for further value recovery,” he said.

“With prices in London now 25% higher than they were in the previous cycle, compared to the European average of 14% lower, investors are showing greater caution,” Almond said.

“Despite this, relative to other assets, central London offices still look attractive, especially to overseas investors where pricing remains competitive in what is the most liquid market globally.”