Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.

German office valuations in the major cities are likely to run up against growing macro-economic weakness later this year and into next, putting an end to the 'honeymoon' period of hesitancy after the rise in yields caused by withdrawal of investor interest, according to indications from Jones Lang LaSalle's recently-launched VICTOR index.

JLL's Head of Valuation Advisory Andrew Groom, whose team developed VICTOR, told PIE in an interview that investor-driven price corrections have pushed average yields up around 100bp to 5.5% over the last 18 months.

"But we have not seen the impact on the occupier side; we are sitting in this sort of honeymoon period almost in the eye of the storm .. waiting to see how much the macro-economic negative effects will have on the occupier side," he said. "We are seeing a slump in take-up in all of the major cities, and that will slowly but insidiously affect prime rental values from the fourth quarter." Company insolvencies are expected to rise strongly next year too.