LONDON—European commercial real estate investment slowed in the first three months of 2014 following five consecutive quarters of growth as investors struggled to deploy capital in their preferred markets of the European Union's biggest economies, analysis by research firm Real Capital Analytics (RCA) shows.

A total of $48 billion (€35.2B) of property transactions were recorded in the first quarter, a 10% decline from the same period the previous year, according to data compiled by RCA. The strong momentum of the preceding quarters meant investment volumes totaled $252 billion (€183.3B) for the 12 months through March 31, a 17% jump from a year earlier.

“A pause was inevitable as difficulties in finding suitable investment-grade product has become a familiar refrain from investors who are frustrated by the intense competition for a shrinking pool of assets, said Simon Mallinson, RCA's managing director for EMEA. “This situation has forced many to re-think their investment strategy, helping revive peripheral European markets, where pricing of prime assets is still attractive, and stimulate demand for secondary assets or locations in core markets.”