Irish investors spent £2.7bn ( 4bn) on UK commercial property in 2005, £100m more than their American counterparts, the report reveals.

That figure was down slightly on the £2.8bn in Irish money which flowed into the UK in 2004, as Irish investment tailed off in line with a moderate decline in the overall level of overseas money flowing into UK real estate.

Among the most notable deals during the year was Quinlan Private's purchase of a 740m property portfolio in Knightsbridge, which alone accounted for one-fifth of the Irish spend in the UK during the year.

Irish investors are expected to spend up to 7bn on property outside Ireland this year. Trevor Gill, associate director at DTZ's international investment division, said that, despite the growing popularity of locations such as the US, the Czech Republic and Dubai with Irish buyers, there is every reason to expect that a large chunk of that money will be making the short trip across the Irish Sea.

Gill said the demand from property speculators was underpinned by "positive rental growth story for the UK, a lack of available product in the Irish market, the availability of finance from Irish lending institutions for UK property transactions, and a familiar market".

The Irish appetite for plum London property was in evidence again in recent weeks as property developer David Arnold narrowly lost out in his bid to buy Covent Garden, eventually sold to British property company Liberty International for 585m.

Arnold was hoping to add the landmark site to the 470m purchase of the Woolgate Exchange building and the 86m Mayfair office building he has acquired so far this year.