Ten of the 13 UK locations in this year's E-REGI real estate ranking of European cities by LaSalle Investment Management slipped down the table.
Only Manchester, 35th, down 9, and Nottingham/Derby, 38th, down 3, remained in the top half of the 98-strong table.
Liverpool climbed 22 places to 54; Leeds came in at 60, up 6, Newcastle was up 4 to 78.
Munich replaced London as the overall number 1 European city for property investors. The UK capital fell sharply to 8th.
Charles Maudsley, LaSalle Investment Management's co-head of Europe, commented: "Notwithstanding its decline in the rankings London remains a very attractive place for property investment because yields have expanded well beyond fair value even allowing for the weak demand outlook. More caution should be exercised outside London and its hinterland. E-REGI continues to highlight the wide variation in prospects for the UK's provincial centres and the capital. This disparity in economic strength needs to be reflected in deal underwriting."
LaSalle compiled E-REGI by ranking the top 98 European cities using a combination of economic growth factors, the overall level of wealth, and the relative attractiveness of the local business market. As a result of the financial and economic turmoil, there are significant changes to the top of the ranking in 2009, to the benefit of wealthy cities and at the expense of locations whose ranking used to be driven by strong economic growth prospects.
Robin Goodchild, LaSalle's head of European research and strategy, said: "Investors need good local intelligence in this market – we have seen more change in 2009 among the top ten cities than in any year since the E-REGI index was launched. Underlying wealth has been a big factor this year, with affluent locations such as the Swiss and Nordic cities, whose strong fundamentals help protects the economy from the effects of slower growth, doing well."
Top 10 E-REGI Rankings for 2009