BERLIN-Jones Lang LaSalle’s VICTOR valuation index of prime office property in the Big Five German cities rose by 1.8% in the fourth quarter against last year’s third quarter, reducing the 12-month value slide to 1.4% from nearly 13% in 2008. For the first time since the start of the downturn, all five conurbations had positive value growth.

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.”

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