The European commercial property investment market saw 59.6 billion euros of assets traded in the second quarter of this year, 5 percent up on the first quarter's total of 55.7 billion euros, an nearly 23 percent higher than in the same period in 2006, the record year to date for commercial property trading in the region, according to Cushman & Wakefield.

The figure for the first half of 2007 stands at 115.3 billion euros. Cushman & Wakefield also predicts that this trend will continue, with total trading volumes for the year now predicted to exceed 243 billion euros.

Foreign investors are in the ascendancy, with their share of the pan-European market rising from 42 percent in the first half of 2006 to 58 percent in the first six months of this year. Britain, Germany and France remain the top markets for investment, accounting for 69 percent of property traded in the last quarter. However, the research cautions that performance levels for most markets have now peaked - with yields largely stable in the second quarter - and with a marked degree of turbulence in the wider investment market globally, investors are growing more cautious over pricing and are focusing on assets that can deliver sustainable income growth.

In the first six months this year, prime yields across Europe, East and West, dropped by a further 16 basis points but the fall in the second quarter was minimal (just 2 basis points). In secondary markets meanwhile, yields have risen as investors focus more on quality assets.

Prime rental growth accelerated to 8 percent in the year to June, led by strong increases in both office and retail markets. Central Europe saw the best office market growth, at 18 percent while Eastern Europe was ahead in both retail and industrial markets.