The prime office locations have entered a phase of stabilization, JLL said, and a comprehensive value recovery is now mainly dependent on a cyclical stabilization of rents. "The positive valuation progress in fourth quarter resulted mainly from the slight change in trend in yields," commented Andrew Groom, head of JLL valuation advisory.

"This mainly impacted prime markets, whose stability in a difficult year and alongside an inflationary danger .. motivated equity capital players such as open funds, insurances and pension funds to go shopping. The quite strong investment pressure from this angle met a continuing shortage on the supply side in core product. In addition, property currently offers a strong investment asset profile in comparison to other options such as equities and government bonds."

The full year valuation downturn indicated by VICTOR contrasted sharply with the dramatic 12.6% slide in 2008, and the continuation of declines in the first half of last year. In the cities measured, annual changes in valuation were -0.8% for Hamburg, over 1.0% downturn in Munich, down 1.3% in Berlin, -1.6% in Frankfurt, and -2.3% for Dsseldorf.