• Despite unexpectedly strong GDP growth during Q1 2008, European economicactivity is anticipated to slow markedly over the rest of the year.
• Eurozone inflation has been rising steeply, driven by escalating food and oil prices. In an effort to control inflation, the European Central Bank raised interest rates in July.
• A mood of increased caution among office occupiers is expected to result in a general weakening of take-up levels this year.
• The slowdown in commercial property investment markets has continued, withinvestment volumes down significantly compared with 2007.
• Following the trend which was first observed in the UK market in the second half of 2007, prime yields have softened in most European markets across all property sectors.

Read the full Knight Frank article below:

European Investment Summary - Summer 08 PDF