Investment in continental Europe reached record highs during the last quarter of 2007 despite the squeeze in the debt market and weaker market sentiment.

A record 44.8bn Euros was spent in Europe (excluding the UK) during the closing months of last year - up 5.4% on the previous high of 42.5bn Euros during the fourth quarter of 2006.

The figures, presented by CBRE at its European Investment Briefing in Cannes this morning, also revealed the turbulence in the financial sector led to a 9% fall in investment in the UK during 2007 - investment activity slowed to 77.2bn Euros for 2007.

Continental European markets which saw increased activity were Germany, France, Belgium and Denmark.

Top cities in 2007 were London and Paris, which accounted for 26% of the investment turnover during the year.

Four German cities, Munich, Berlin, Frankfurt and Hamburg, made it into CBRE's top ten alongside Moscow, Amsterdam, Madrid and Stockholm.

Nick Axford, head of research and consulting for EMEA at CBRE, said: 'Rental growth will drive investment volumes going forward as investors return to basics.

'Rental growth is slowing in London's West End, Cit and in Birmingham but in most other European markets it is accelerating.'