European real estate markets are heading for record investments this year, driven by capital from cross-border deals, the Middle East and Asia. In the first six months of the year, Euro55.2 billion ($516.96 billion) was invested in real estate projects within the European Union, an increase of 22 per cent year-on-year, said CB Richard Ellis (CBRE) during Expo Real in Munich last week. CBRE head of research Nick Axford said half of the capital chasing European property came from outside the EU, with investors from the Middle East and Asia contributing increasingly to the upward dynamics. 'European real estate markets look a little bit pricey but economic conditions have improved and interest rates will stay low,' Mr Axford said. Eugen Egetenmeir, deputy managing director at Messe Munich International, the Expo Real organiser, said the rising attraction of European markets was highlighted during the show by a more than 30 per cent increase in international visitors. High up on the monitor of foreign investors is the CEE region - Central and Eastern Europe - which saw a 40 per cent rise in fund flows in the first half of the year, mainly to the Czech Republic, Poland and Hungary. Real estate markets in the new EU countries were driven mainly by foreign direct investments into production plants and infrastructure, which translated into rising demand for commercial and retail properties. Germany is another destination attracting a rising portion of the inflow of real estate funds into Europe. After a long glut in the market following the fall of the Berlin Wall and economic stagnation, the country is seeing some signs of economic revival. For international investors, Germany seems until recently to have been a laggard in the European real estate story. Mr Axford said: 'Foreign investors, who for years have been ignoring the country, now account for a major part of transactions. Looking at the transaction trends in the European property investment market, it is hard to find reasons to be anything other than bullish about the prospects.'