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.

JLL launched the index in 2009, reaching back to 2006, and has now extended measurements back to end-2003. The clear peak was second quarter 2007 amid the 'wall of money' flooding into Europe from all sources. In a historical context, the present stabilization is taking place five years after the last floor at the end of 2004, it noted.

Valuation growth in the upswing of about 30% was completely dismantled by mid-2009. Over the entire six years of the index, Hamburg prime office property, with 5.5% value growth, has been strongest, and Berlin was weakest, losing 3.5%. More short term, the best performances in fourth quarter 2009 came in Hamburg, Dsseldorf and Frankfurt city centers and banking districts.

Patrick Metzger, head of JLL Frankfurt valuation advisory, noted that VICTOR has high correlation with similar European indices, showing that markets are mainly influenced by global economic factors in producing high synchronization of property cycles.

Added Groom: "Even if valuations have now swung into a positive trend, the financial crisis is not yet completely behind us. In addition, danger continues to lurk from the still quite tense situation in rental markets in 2010, with declining space letting volumes and a continuing climb in vacancy levels, alongside rental declines. Any valuation impulse we see from the investment market could easily be offset by these factors." Story Body:HELSINKI-The volume of major transactions in the Finnish property market last year reached €1.7 billion, with some €590 million dealt in 4Q09, the largest quarterly volume since 3Q08, according to Helsinki-based research group KTI.

Foreign investors accounted for 17% of all deals, a significant fall compared to 44% in 2008 and 59% share in 2007. Retail properties were again the most popular property type, accounting for more than 30% of volume, followed by industrial properties and office.

On the supply side in the Helsinki metropolitan area, only some 60,000 square meters of new office space was under construction at the start of 2010, with another 80,000 sq.m. under redevelopment. Office building has dropped significantly over the last year: after more than 100,000 square meters new space came onto the market, only a few new projects have been started. This compares with the beginning of 2009 when more than 150,000 square meters of new office was under construction and some 40,000 square meters in major redevelopment.

In the residential market, Statistics Finland reported that the prices of existing apartments and terraced houses continued to increase, rising 2.8% in 4Q09 over 3Q09. In Greater Helsinki, this was 3.4%, against 2.2% elsewhere in the country. However, residential prices in Helsinki soared by 11.6% over the year, and rose by well over 10% in other cities such as Espoo and Turku.