With signs of economic improvement and attractive returns, investors are flocking to European real estate. Southern Europe has seen a dramatic uptick in commercial real estate investments so far this year, particularly in Italy and Portugal, according to Real Capital Analytics.

“Southern European investment is definitely on the rise this year as the economy continues to grow stronger,” Tom Leahy, director of EMEA analytics at Real Capital Analytics, said in a statement. “We are back to pre-crisis 2007 levels in transaction volume terms.”

The low interest rate environment is a sign of improving economic growth prospects. And low inflation appears to have persuaded investors that the rewards outweigh the risks.

In Q1 2015, European commercial real estate investment registered its most active first quarter since 2007. Europe had transaction volumes of €63.8 billion, a 57 percent rise in the first quarter compared to the first quarter of 2014. Capital from