This is against a backdrop of increased caution around rising risk free rates which has impacted European office investment transactions. Transaction volumes reached €19 bn for the quarter, a 28% fall against the five year Q3 average, says the international real estate advisor.

Prime European office yields have increased by an average of 40 bps since Q1 2022 to account for higher financing costs, rising from 3% to 3.5% in Amsterdam, 2.9% to 3.25% in Milan and 2.6% to 3% in Paris CBD, according to Savills.

Mike Barnes, associate director European research at Savills, said: 'The European investment market is undergoing signs which are common to a period of price discovery. Falling real estate fundraising, a rise in refinancing risks and NDAs on transactions are becoming more common, with no buyer wanting to be known to have paid the last record low yield.

'Investment transactions are still underway in Q4 2022, although the number of investors is thinning, particularly for value add stock as buyers seek larger discounts. We expect this to be reflected in pricing with further outward movement during Q4 2022 and motivated sellers returning to the market in Q1 2023.'

Chris Gillum, head of offices, European capital markets at Savills, said: 'American and Singaporean buyers, along with Middle Eastern sovereign wealth funds, and high net worth family offices are likely to be among the main international buyers in Europe over the next six to nine months, who will also benefit from a relatively weak euro.

'Negotiations on pricing are currently taking more time, although the number of forced sellers is still limited as investors attempt to secure more favourable debt terms on refinancing.'