London’s property market still ranks top in popularity with investors and has strong growth prospects according to the latest Knight Frank European Investment Commentary Research Report published today.

In its ‘strength rankings’ it said London still ranked most popular with investors showing strong growth prospects while Scandinavian cities, such as Oslo and Stockholm, featured in the top ten and are expected to ‘comfortably outperform’ the European average.

Dublin was third in the top 10 (see below) while Poland’s capital Warsaw scored the highest of the Eastern European countries with strong occupier demand fuelling the growth of the market.

It said overall the Eurozone’s GDP continued to grow ‘above trend’ in 2007 although growth was expected to slow next year from 2.5% to 2.1% next year.

It added that the fallout from the US subprime crisis has spread to Europe ‘ushering in a period of uncertainty in the financial markets’ while a steep rise in inflation had ‘left the European Central Bank with little room for manoeuvre to cut interest rates’.

The property fundamentals of most of Europe’s office markets still seem strong with occupier markets remaining strong, vacancy rates continuing to fall and rental growth.

The report measured factors likely to drive occupier and investor demand and are based on a range of indicators of recent economic and property market performance and medium-term forecasts.

Factors considered included GDP growth, employment growth, rental growth and risk rankings.

Knight Frank's European Strength Rankings
1 London
2 Stockholm
3 Dublin
4 Madrid
5 Oslo
6 Munich
7 Paris
8 Helsinki
9 Amsterdam
10 Barcelona
11 Frankfurt
12 Lyon
13 Copenhagen
14 Warsaw
15 Hamburg
16 Vienna
17 Brussels
18 Birmingham
19 Milan
20 Prague
21 Geneva
22 Moscow
23 Budapest
24 Rome
25 Manchester
26 Glasgow
27 Lisbon