In the recent Catella newsletter Statements, she said that in the medium term the German real estate market will be one of the better performers, benefiting from its solid economic base. "Germany benefits from the relatively stable economic situation, and will most likely remain attractive for investors," Becker said, noting that German investors were the most active buyer group on the European market in recent months, followed by those from Mid-East and Russia--partly due to the more than €3 billion collected by open-end property funds.

"Many companies are making the most out of this positive situation, and have started investing in real estate again. In doing so, they are making an essential contribution to the recovery of the global real estate markets," she said.

Short term however, credit would be key. "Most banks still restrict their lending to limited loans at very expensive terms. At the moment, financing is still easiest to obtain for residential real estate, and many market players do not expect to see a sustained recovery of the European credit markets before 2010."

In terms of market structure, Becker noted that first half 2009 was characterized by smaller deals with a core profile. "The tendency is the same on every market: The properties now transacted belong in the core property bracket of €20 million to €50 million. Institutional investors such as major life insurance companies and pension funds-- but also high net worth individuals and family offices--are active in this segment."

She added that follow-up financing for a vast number of properties across Europe will also be key to market recovery. "Many of those acquired during the bull market are coming up for rollovers in the next two years. It will be interesting to see how banks will handle most of these cases. At the moment, the markets are certainly going through a sound stabilizing phase. Just where the train is going though remains to be seen in the coming months."