Investment turnover in European real estate should increase in the second half of 2012, although annual investment volume this year will still fall below the levels of 2011, according to Savills in a report highlighting a wide performance gulf between parts of the continent.

Volumes of investment are likely to fall by at least 5 per cent in 2012 from the previous year, contrasting with a 5.1 per cent year-on-year gain between 2010 and 2011, Savills said in a market report on European property.

There is rising interest in deals such as those involving distressed properties, both in the core and peripheral parts of Europe, but obtaining finance for non-prime properties is becoming more difficult, so the rate of transactions will be slower, the firm said.

Total investment volume in Savills’ survey area for Europe fell 0.5 per cent in the first half of 2012 from a year before; the figure masks considerable variation in certain countries, however. Trends in Austria, for example, were positive, with volume increases of 15 per cent, and a rise of 38 per cent in Belgium and 68 per cent rise in Sweden. But the rises were offset by falls in other markets. The big four markets – the UK, France, Germany and Sweden – comprise about 85 per cent of volume.

Among the weaker countries, the Greek property investment market is at a “standstill”, Savills said; Germany’s market logged an 18 per cent fall in turnover for the first half of this year from the same period a year ago. In Ireland, however, a country that has seen a rollercoaster property market, turnover in the first six months stood at €140 million, more than a four-fold increase. The turnover in Ireland was driven by a large rise in supply, improved sentiment and recognition of value. Investment volumes have also fallen in Poland and the Netherlands.