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Despite the ongoing Eurozone crisis, real estate investment activity increased in the second quarter of 2012, with cross-border investors driving volume in the major markets, according to Jones Lang LaSalle's latest capital markets survey. Cross-border transactions accounted for 40% of volumes which rose overall by 17% compared to Q1 2012 to EUR 27 bn.

However, there were limited transactions in Southern Europe and most cross-border deals were focused on a narrow range of geographies and assets. Europe continues to attract the lion’s share of inter-regional investment, with US buyers coming to the fore. The UK and France saw 75% of total deals involving a cross-border party, 70% in Russia and 50% in Germany. Three of the largest cross-border deals were in London.

Worldwide investment volume in Q2 was flat year on year but gained 24% on Q1 2012 to $108 bn (EUR 89 bn), according to data collected from more than 60 countries by Jones Lang LaSalle Capital Markets Research. This reverses the slight dip in activity recorded in Q1 2012 where volumes reached $87 bn. The Americas posted the most significant increase in quarterly volumes, with a 33% rise to $47 bn while Asia Pacific was the only region to record year-on-year growth, with $26 bn compared to $20 bn in Q2 2011 as China, Australia, Hong Kong and Singapore all recorded increased trading activity.

At the city level, London retained the top spot for most active city in Q2 2012, with $8.7 bn of total volumes, nearly twice that of Paris and New York with $4.7 bn and $4.3 bn respectively. Robert Stassen, Head of European Capital Markets Research at Jones Lang LaSalle said, 'Real estate lot sizes (in London) are in the right bracket to attract the big ticket money. You also have all the benefits of a strong education system, a central time zone, good transport links and a stable government. If the market picks up in the second half of the year, we will see interest grow in real estate outside of the capital.'

For the second half, JLL is predicting increased activity as investors continue to move towards real assets as yields from other asset classes remain low. 'We have seen increased activity from Canadian, US and Middle Eastern money. We can also expect increased activity from capital from Asian countries such as China, Indonesia and Thailand,' noted David Green-Morgan, Global Capital Markets Research Director.