If you're looking to invest in real estate, New Europe is the place to be.

While the rest of that continent is mired in an economic malaise, rapidly growing markets like Poland and Russia are hotbeds of retail property investing, according to data from global real estate adviser CB Richard Ellis.

Poland became the third most active retail investment market in Europe in the first half of 2011, with $1.73 billion transacted. In Central and Eastern Europe, retail investment in the first half of 2011 reached $3.5 billion, driven by growth in Poland and Russia. Strong investor demand in the Nordics led to some interesting changes in that more cross-border buyers from outside the region were active, particularly in Sweden.

"Growing differences in the way European retail markets are behaving have emerged in the last 12-18 months, even within the same currency zone such as the Euro," the head of European Retail Investment for CBRE, John Welham, said.

Overall retail property investment in Europe reached $29 billion in the first half of 2011, accounting for 37 percent of commercial real estate investment, well above the long-term average of 28 percent. CB Richard Ellis says strong demand from non-specialist investors, especially those from the Middle and Far East, has also provided a significant boost to retail investment activity.

The growing divide in economic performance across Europe and the re-emergence of sovereign debt issues is becoming a greater concern for retail property investors. Even more so than in the recent past, retail investment and pricing has closely followed economic performance, with investors focusing on the faster growing economies such as those in the Nordic region, Germany, Poland, and Russia.

This contrasts with decreased activity in the United Kingdom, with its overall share of European retail investment falling to 36 percent in the first half of 2011, well below the historic average of 45 percent. Weak economic growth and falling consumer confidence have fed through into negligible growth in the retail investment market, with activity falling to under $2.89 billion in the second quarter of 2011 - half the long-term quarterly average and a level only slightly above the quarterly activity seen at the bottom of the market in late 2008.

Germany, on the other hand, is underpinned by strong economic and occupier market fundamentals, according to the real estate firm. It grew to 31 percent of the retail investment market at $9 billion, with investor interest spreading into second-tier markets, and in some cases towards more 'value-added' assets, CBRE said.

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