In the most mature and largest UK and European markets, prime properties in the regional cities have seen a surge in demand, according to a June report from Savills.

LONDON—In the most mature and largest UK and European markets, prime properties in the regional cities have seen a surge in demand, according to a June report from Savills.

The demand is coming increasingly (and particularly in the case of Germany), from cross-border buyers. Prime yields in London (4.5%), Munich (4.25%) and Frankfurt (4.5%) are at historically low levels, the report notes. So well-established regional economic centers may be a good investment alternative.

There is a clear increase in activity year-on-year: the total transaction volume increased by 91% in

Manchester and 76% in Birmingham, while office investment jumped by 150% in Dusseldorf, 130% in Hamburg and still 93% in Munich.

Meanwhile, in smaller markets there is limited foreign buyer interest in secondary assets and/or regional locations. Savills says this is especially the case in Belgium, but also in centralist France, where 30% of GDP is generated in the Ile-de-France.