JLL said this is further evidence of the slowdown in European real estate markets, and it is highly unlikely that turnover for the full year will match the 2000 total of €19 billion ($17.1 billion).

Some markets have performed more strongly than others, and the UK has regained the number one position as the favourite destination for international capital, replacing France. In the first half of the year the UK saw €2.5 billion ($2.25 billion) invested--44% of the entire European market--and is one of the few markets likely to exceed its 2000 total turnover.

Nick Leming of Jones Lang LaSalle's European Research team said: 'In the current uncertain economic climate, the size, liquidity and transparency of the UK market, together with its relatively robust economy and perceived security of income from long leases, are major attractions and are helping the UK to achieve this higher level of performance.'

Offices remain the favourite sector for cross-border investors, accounting for 80% of all cross border deals in the first half of 2001. Retail accounted for 11%, up on last year. JLL says several large shopping centre deals due to completed in the second half of the year are likely to push this proportion higher.

Germany is still the leading exporter of capital. German funds accounted for 29% of all deals, although this is down sharply on thee 2000 level of 42%. The open-ended Publikumsfonds are still the most aggressive bidders. North American funds represented 21% of cross-border deals, while Middle Eastern investors increased their cross-border activity to just under €1 billion ($0.9 billion) in the first half of 2001 compared to €657 million ($600 million) in the whole of last year.

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