European investment activity has continued its decline, but there are some signs of improving activity, according to research released by a leading independent global property consultancy.

A study conducted by Bahrain-based Knight Frank Middle East’s capital markets team has revealed that a spark of investor interest in the Central London and Paris markets during second half of 2009 may be the first sign of improved activity.

The European economy performed very badly during the first quarter of 2009, with Eurozone GDP recording a quarterly fall of 2.5 per cent. However, more positive economic news emerged during the second quarter, and the pace of decline appears to have now slowed.

The study further said that occupier demand for office property remained weak, leading to much reduced take-up levels across Europe’s main office centres in the first half of the year. Vacancy rates are rising almost everywhere.

Prime rents have been falling, particularly in the office sector, with markets including London and Moscow seeing especially steep drops. Further rental decreases are anticipated in the second half of the year.

“Middle Eastern investors would be wise to consider European centres as asset prices look attractive when compared to the UK,” said James Lewis, director of investment and leasing, Knight Frank Middle East.

“As a counter-cyclical investment strategy, the timing to invest in centres like Paris is likely to be optimum towards the end of 2009,” he added.

Lewis is part of Knight Frank’s international capital markets team which spans every major global market. It provides a range of professional services to the investment and corporate finance markets across the region, allowing clients maximum returns on investment and reduced risks, said a statement. – TradeArabia News Service