According to a new research report published today, Hines, one of the world’s leading real estate investment managers, sees a clear divergence emerging in the European office market. As tenant demand increasingly concentrates on high-quality buildings and new supply remains constrained, pricing power is shifting decisively towards prime assets. This is creating what Hines considers a selective, yet compelling, investment opportunity in prime European office properties.
In its latest research report, “The European Prime Office Rebound”, Hines concludes that tenant demand is becoming increasingly concentrated in high-quality buildings and central locations, even as overall space requirements continue to shrink. At the same time, supply is tightening. New office development starts have fallen by 80% from their most recent peak (RCA, Q4 2025), while the pipeline of new high-quality stock remains limited across Europe’s major markets.
This imbalance is driving sustained rental growth. Prime rents across Europe, according to the EU-15 weighted index, have increased by 35.6% since Q4 2019 (CBRE, Q4 2025). In markets where new supply remains limited, particularly in leading CBDs — such as the West End — competition for high-quality space is intensifying, enabling the strongest assets to capture a disproportionate share of demand and sustain rental growth. This strength in fundamentals is increasingly being reflected in market activity, signalling a recovery in investor confidence.
The report also concludes that while hybrid working has reduced aggregate demand, it has sharpened occupier preferences and accelerated the flight-to-quality dynamic. This bifurcation has created a clear differentiation between prime and secondary assets, positioning Grade A office assets as the segment with the most favourable fundamentals across the European real estate asset class spectrum.
“The greatest risk right now is to view offices as a single asset class,” said Alfonso Munk, Co-Head of Investment Management at Hines. “The dispersion between assets is high and continues to widen. In certain parts of the market, fundamentals have already turned the corner; capital simply has not yet fully repriced. That gap is where we see opportunity.”
Hines has recently made several trophy asset investments, including the new headquarters of Goldman Sachs in Paris, located at 83 Avenue Marceau and acquired in February 2026, as well as the repositioning of the landmark Diagonal Vertical tower in Barcelona, which reopened in December 2024 and has achieved record rental levels in the market. Hines is also developing B’Ella Berlin, a 730,000-square-foot mixed-use project in the Schöneberger Linse district, designed to operate fossil-fuel free and scheduled for completion in Q1 2029.
These investments reflect Hines’ conviction in a set of selective opportunities focused on high-quality, supply-constrained assets that are well positioned to capture concentrated demand and sustained rental growth, while reinforcing long-term portfolio resilience and income visibility.
About Hines
Hines is one of the world’s leading real estate investment managers. The firm owns and manages $91.7 billion of assets across a range of property types on behalf of a diverse base of institutional and private clients. Every day, its 5,000 employees across 30 countries draw on the firm’s 69-year history to help build the future through the investment, development and management of some of the world’s finest real estate assets.
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