The prime office locations have entered a phase ofstabilization, JLL said, and a comprehensive value recovery is nowmainly dependent on a cyclical stabilization of rents. "Thepositive valuation progress in fourth quarter resulted mainly fromthe slight change in trend in yields," commented Andrew Groom, headof JLL valuation advisory.

"This mainly impacted prime markets, whose stability in adifficult year and alongside an inflationary danger .. motivatedequity capital players such as open funds, insurances and pensionfunds to go shopping. The quite strong investment pressure fromthis angle met a continuing shortage on the supply side in coreproduct. In addition, property currently offers a strong investmentasset profile in comparison to other options such as equities andgovernment bonds."

The full year valuation downturn indicated by VICTOR contrastedsharply with the dramatic 12.6% slide in 2008, and the continuationof 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.