Retail transaction volumes across continental Europe reached €3.9bn (£3.1bn) in the first quarter of 2008, despite the slowdown in investment deals caused by the credit crunch.

In the same quarter of 2007, €4.1bn (£3.3bn) was transacted, according to research by Jones Lang LaSalle.

The dip this year reflected the change of sentiment caused by the lack of liquidity in the market, JLL said. However, the firm added, the fact that a large number of deals were being done showed that investors still have faith in the retail market in continental Europe.

Richard Bloxam, director of European retail capital markets at JLL, said: ‘The fundamentals of the retail sector across continental Europe remain broadly positive, with strong occupier demand for prime property and retail sales growing in most of continental Europe.

‘Prime yields have therefore remained fairly resilient, with only a slight outward movement in yields in some markets. With few prime assets coming to market, the market is less transparent.

‘Deals are taking longer to complete as buyers and sellers look for a consensus on pricing. We expect transaction volumes to remain below 2007 levels in the coming months, but we anticipate these to pick up again once the new pricing benchmarks have been set.’

Shopping centres were the prime target for investors – 71% of transactions in the first quarter, whilst supermarket investment represented 10%. Retail warehousing fell to 18% from 24% in 2007.

Germany was the most active market, accounting for 16% of the total volume transacted as retail sales recovered in the country.

A number of major deals of over €100m (£80.2m) were transacted, including in Finland, where Protego bought the Kamppi shopping centre from Boultbee for €453m (£363.2m).