Hines [Real Estate - Europe]

Hines is a privately owned global real estate investment, development, and property manager with €78.3 bn¹ in AUM. Since its inception in 1957, the firm has grown to more than 4,600 professionals in 30 countries.

The firm employs various strategies to pursue acquisition and development opportunities, and its diverse suite of investment vehicles covers a wide range of property types, geographies, and risk profiles.

Hines is distinguished in the market by its local expertise and relationships, proprietary research methodologies, holistic stewardship-based investment approach, and pioneering sustainability commitments, including achieving a net-zero operational carbon target by 2040. Hines is one of the largest and most respected real estate organizations in the world.

Please visit www.hines.com for more information.

_{¹Includes both the global Hines organization as well as RIA AUM as of June 30, 2025.}

Sector forecasts

INDUSTRIAL: Industrial market conditions continue to soften as the e-commerce surge in tenant demand winds down. Demand growth has averaged 2.8% over the past year, whilst supply has grown by 4%, driving vacancy rates up to 5.6%, their highest since 2014. Vacancy has been highest across corridor locations in the UK and Central Europe, where rents have started to plateau. Urban logistics locations serving end-consumers have, meanwhile, exhibited more resilience with higher levels of rental growth and lower vacancy rates overall. As the supply demand imbalance moderates, we expect rental growth to resume to the tune of c. 3% p.a. over the next five years. The recovery in capital values appears well underway, with prices having grown by 5.6% over the year to Q2 2025, supported largely by persistent rental growth in key urban locations. (CBRE; Hines Research, Q2 2025)

OFFICE: The post-covid bifurcation in office fundamentals has recently exacerbated, with high quality, centrally located assets experiencing the strongest demand. Prime CBD office rent growth has increased to 6.6% p.a., the highest of the main property types, whilst next-tier submarkets have recorded prime rent growth of 3.1% p.a., as supply/demand imbalances spread to good quality stock in secondary locations. (CBRE; Hines Research, Q2 2025) Grade A office vacancy rates average just 3.2%, when compared to 8.7% for the sector at large. Whilst prime rent growth was expected to moderate, positive leasing momentum is likely to drive robust growth going forward. Investor sentiment remains subdued, and the office share of total European transaction volumes fell from 43% at end-2019 to just 23% at mid-2025. Heavily discounted pricing has, however, started to attract some institutional buyers to core markets, with signs of modest cap-rate compression emerging across Paris, London and Munich. (RCA; Hines Research, Q2 2025)

RESIDENTIAL: The residential sector faces the greatest supply shortage of the main property types, as population growth across key cities continues to outpace the delivery of new housing. This imbalance is likely to persist with residential starts down -81% from their recent peak. (GreenStreet; Hines Research, Q2 2025) At Q2 2025, over 80% of European residential markets experienced annual rent increases, and all but two of the thirty major metros we track across Europe face undersupply. (GreenStreet; Hines Research, Q2 2025) Affordability concerns may drive more moderate forward growth, but rents are expected to rise in line with nominal wages, currently ranging between 3-4% p.a. (Oxford Economics, Q2 2025). The most supply constrained markets, such as Madrid, Stockholm and Berlin, are likely to experience greater competitive rental tension.

RETAIL: A north-south divide in European retail performance has emerged, with Iberian markets exhibiting stronger consumer confidence, continuously lower e-commerce penetration rates and higher levels of discretionary spending. Market conditions have been slower to improve across northern Europe, although grocery anchored retail parks continue to outperform, and pan-European retail rent growth has returned in earnest for the first time in five years, with 5.1% annual growth recorded across prime high streets and 2.3% for shopping centres. (CBRE; Hines Research, Q2 2025) Rents have rebased to sustainable levels and whilst retail operating fundamentals have improved, capital values remain -27% and -48% below their recent peaks for high street retail and shopping centres respectively. This has prompted a long-awaited increase in investor activity which is likely to continue to drive values higher.

Investment principles & strategy

Hines’ investment philosophy is to focus on high-quality properties and maximize value creation, which translates into more consistent investment performance for investors over the long term while mitigating short-term downside risks.

Hines applies this philosophy to properties in all real estate sectors—mixed-use, residential, retail, industrial, office, and niche properties—across the risk spectrum and around the world.

Investment activity at Hines is identified at the local level and approved by the Investment Committee, which provides pattern recognition across geographies and product types, market intelligence, strategic foresight, and risk assessment. This differentiated approach – including a vertically integrated structure that promotes deep local knowledge, proven investment management capabilities, and extensive subject matter expertise – is key to delivering returns for investors. Hines believes that the integration of these critical real estate investment functions within one organization provides a competitive advantage that will directly benefit the investment.

Strategic corporate development

Hines’ corporate development strategy is to grow organically. Since its inception in 1957, Hines has grown to $78.3bn1 in AUM and more than 4,600 employees globally. Hines is a vertically integrated real estate investment manager with significant development and property management capabilities, paired with a long history of understanding how sustainability and innovation intersect the built environment.

_{¹ Includes both the global Hines organization and RIA AUM as of 30 June 2025.}

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