Tony Horrell, Head of European Capital Markets at Jones Lang LaSalle said: "In the first quarter of 2009 we have noted improving sentiment and increased bidding; in the last three months we have seen investors seeking high quality and long-term good income.
"However there is a lack of good prime product and at the same time the accepted definition of the prime asset class has narrowed considerably.
"Whilst yields in some markets moved out marginally in the last quarter, yields in many markets remained stable, for example in the City of London, Amsterdam, Frankfurt, Hamburg, Munich and Paris. This genuine interest from some investors is a positive sign but only time will tell if key deals will sign in the coming months."
In the UK direct commercial real estate investment volumes were €4.4billion in the first quarter of 2009, a slight upturn (4%) compared to the previous quarter and largely accounted for by transactions in the central London market.
In Germany €1.6billion was transacted in the quarter, down almost 50% on the previous quarter; the lack of transactions reflecting a "wait and see" attitude from domestic investors who have not been forced into distressed selling as well as the lack of debt required to fund larger transactions.
Investment activity in Central and Eastern Europe (including Russia) was limited to a handful of transactions in Q1 2009, totalling €536million.
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