Speaking at the launch of 'Market Watch', a research document published by LaSalle Investment management, Robin Goodchild, the firm's European director of research and strategy, said: 'The European real estate community has learned some hard lessons since the early 1990s, limiting speculation and controlling overbuilding in the ensuing years. Despite the fact that when the US sneezes the rest of the world catches cold, Europe's real estate will remain resilient.'

The UK's main weakness lies in the fact that total exports to the US are a higher proportion of GDP than any other country. And second, it receives the most foreign direct investment. Germany is also more exposed than other continental countries with France the most insulated against economic downturn.

The European property markets began 2001 in excellent condition and LaSalle predicts that the existing buoyant domestic demand will remain for at least the next two quarters. 'If the US economy is back on track by then, we predict 2001 will be another good year for investors,' said Goodchild.