Investment the European commercial real estate market plummeted 12% in the first half of the year, according to new research from Cushman & Wakefield.

The drop over the first six months of 2016 is despite European investment activity rising 9% to €56.8bn (£49bn) during the second quarter of the year.

The first half of the year totalled €109bn, 12% down on the same period in 2015, with the UK - Europe’s largest market - acting as a drag on overall European performance.

Concern over Brexit and uncertainty surrounding the decision was a significant factor in restricting the volume of trading in the UK to €32bn in the first half of the year, a 35% decrease on the same period a year ago.

Nigel Almond, head of EMEA capital markets research at Cushman & Wakefield, said: “After excluding pan-European portfolios, activity across Continental Europe continues to shine with volumes in the first half of 2016 reaching €77bn, a 3% increase on the €74bn recorded in the same period last year. Despite seeing a rise quarter-on-quarter in Germany, volumes for the first half of the year reached €18bn, a 26% drop on H1 2015. France saw modest growth of 2% over the same period.”

A spike in investment activity in Sweden has seen trading surpass French volumes in the second quarter and over the first half of 2016. At €7.3bn Sweden registered its highest-ever quarterly volumes pushing up volumes for the half year to €10.6bn. This is more than the €10bn traded in the whole of 2015. Activity was buoyed by Castellum talking control of the Norporten portfolio in Sweden from the Second and Sixth National Pension funds for over €2bn.

Central and Eastern Europe (CEE) also recorded significant investment growth to surpass €4bn in the first half of 2016, a 60% increase on the same period the previous year.

Across Europe as a whole, 19 of the 29 markets tracked recorded an increase in first half volumes compared to the first half of last year. Domestic investors took the opportunity to increase their share in a weaker market, accounting for 61% of activity, the highest share for the first half of a year since 2013. This was largely upheld by stronger domestic activity in France with increased activity also evident in Germany and Sweden. On the other hand, non-European shares slipped to 21%, well below the near 30% levels that have been seen in recent years.

Beyond continued activity from globally-sourced funds, the next key sources of non-European investment were from the US, Singapore, South Africa and Hong Kong. The growth in activity from South Africa reflects, in part, a growing number of listed funds targeting the CEE region.

Unlisted funds continued to dominate as the most active buyers over the first half of 2016. Of significance has been the growth of private companies and individuals, who took a 24% share of the market during this period, reflecting strong levels of investment in the UK, Germany, Sweden and the Netherlands. The majority of this was from domestic companies or individuals, although the UK did see over a third of capital sourced from overseas investors. On the contrary, institutions and listed companies were less active during the first half of the year.

Although markets have started to settle in the wake of the UK’s decision to leave the EU, uncertainty still remains. The impact appears to be greatest in the UK, although even here, while some deals in the market at the time of the vote have fallen away the majority continue to progress, especially across Central London compared to the rest of the UK.