Property transaction activity in London will pick up ahead of Paris, according to one of France's leading property developers, as investment values and rents plummet.

Phillipe Zivkovic, executive chairman of BNP Parisbas Real Estate, told a seminar at MIPIM in Cannes, that the French investment market was still adopting a wait and see approach, while London would be targeted over the coming months particularly by German funds.

'If you look at the Paris market, the investors there are looking at the price levels and wondering if they are sufficient to create an opportunity of capital gain,' said Zivkovic. 'Instead they are taking an increasing interest in London, where there has been a sharp drop in values.'

Also on the panel was Meka Brunel, managing director Europe of SITQ, the real estate subsidiary of the Caisse de dépôt et placement du Québec. She predicted that rental levels in London still had further to fall, sharpening the fall in investment values. 'There has been a drop in the rental levels in London and I doubt that process is over,' she said. 'There could be another 20% farther to go.'

She added that although rent reviews were not supposed to "go downwards", landlords were finding themselves in such a predicament that tenants could secure favourable terms. 'Many occupiers will be going to their landlords and seeing if they can do a deal. Right now, we [SITQ] are not sure about rental levels.'

Zivkovic added that BNP Parisbas would continue to adapt its model to the turbulent market conditions. 'We need to build a war machine to make sure we are in all the right places when the market comes back.'