Commercial real estate investment volumes in the UK dropped by 19% in 2019, reflecting investor caution amid political uncertainty.

Investment volumes in the UK totalled €60bn (£51m), down from €74bn in 2018, according to CBRE.

Across the whole of Europe (including the UK and Ireland), investment volumes totalled €315bn in 2019, down 2% from €322bn in the previous year.

However, continental Europe performed well, with commercial property volumes hitting a record high of €248bn in 2019.

This represented a 2% increase from €243bn in 2018, which was previously a record for investment volumes.

Chris Brett, managing director of EMEA capital markets at CBRE, said: “2019 proved to be a record year for real estate investment in continental Europe, with many countries experiencing record levels of investment. The UK proved more challenging, with many overseas investors taking a more cautious approach amid heightened political uncertainty.

“There continues to be a scarcity of prime product across the major capital cities in continental Europe, which has driven yields to record lows. However, capital flows towards real estate are strong and M&A activity remains prevalent in the sector. The European Central Bank’s decision to lower interest rates and restart quantitative easing gave an added impetus to investment volumes in the fourth quarter, and we expect the market environment to remain favourable towards European real estate investment in 2020.”

Germany, France, the Netherlands, Sweden, Ireland, Austria and Portugal all achieved record levels of investment in 2019. Gains were particularly significant in Austria, Sweden and Ireland, which rose by 39%, 56% and 58%, respectively.

Investment volumes in Ireland also reached a new high of €7.2bn, exceeding all forecast expectations. This was driven by the €1.3bn sale of the listed Green REIT to Henderson Park and Starwood’s €550m sale of the Cedar portfolio.

Germany was the largest investment market in Europe for the second year in a row. Total investment volumes reached €84bn, up by 8% on the previous year.