European commercial property prices grew by a record 7.8 per cent in the fourth quarter of last year, fuelled by the ongoing recovery in the UK’s regional property markets.

Figures out yesterday by property adviser DTZ show that prices rose by 20 per cent for the year overall thanks to a record last quarter, when investors splurged €65bn (£47.4bn) on European commercial property.

The strongest growth was in the UK regions, which increased by 35 per cent compared to a year ago.

Nigel Almond, the head of Capital Markets Research said: “Prices outside of London in the UK only began to show clear signs of recovery at the beginning of 2014, having fallen by close to 50 per cent from their peak in 2007. As a result prices are still 25 per cent below their peak and back at 2004 levels.”

Central London also performed strongly, up 23 per cent year-on-year. However, Almond said the rate of growth was beginning to cool. Prices in London rose by just five per cent in the fourth quarter compared with eight per cent in the third quarter.

“The cooling comes as no surprise as prices in London are now 20 per cent above their previous peak in 2007,” Almond added.