Hines has completed the first close of Hines European Real Estate Partners IV (HEREP IV), its fourth European value-add fund, having raised over €500 million in capital commitments. The fund includes both new institutional investors and those already associated with the manager, amongst them sovereign wealth funds, pension funds and insurance companies from Europe and the Americas.
HEREP IV aims to reach a total volume of €1.5 billion and has already begun deploying capital across various European markets. Its strategy covers the residential, logistics, retail, prime office and alternative asset segments, with a pipeline of transactions under review that includes off-market opportunities.
The launch of the fund coincides with the gradual stabilisation of the European property market following several years of valuation corrections. Hines believes that price adjustments, improved financing conditions and the limited supply of new properties are creating more favourable entry points for value-add strategies.
This view is also reflected in Hines Research’s Mid-Year Outlook 2026 report, which identifies a shortage of supply as one of the key drivers of long-term value creation in Europe. According to the firm, demand for office space remains resilient across several segments, while barriers to development are limiting the creation of new assets and underpinning occupancy levels and rental growth.
The European residential sector ranks among the key opportunities identified by the firm. Hines noted that rental market conditions are approximately twice as strong as in the United States, due to a housing shortage and low levels of development activity in many of Europe’s major cities.
The report also highlights an improvement in retail fundamentals, with rents rising by more than 5% in Europe during 2025, as well as a normalisation of the logistics market following a slowdown in new supply. In the office sector, the management firm maintains its interest in well-located prime assets, particularly those capable of meeting the demand for higher-quality spaces with a wide range of services.
In Spain, Hines identifies opportunities in residential, retail, logistics and prime office properties. The company highlighted the trend in consumer spending and the operational performance of retail operators, which could drive rental growth in retail parks, shopping centres and high-street properties.
In logistics, the firm observed a gradual return to balance between supply and demand, while in the office sector it pointed to liquidity and rental growth in central business districts. The residential sector, meanwhile, continues to be characterised by limited supply following two decades of subdued development activity.
Hines estimated that the housing shortfall in Madrid and Barcelona stands at several hundred thousand units and forecasted that residential rents will grow by between 3% and 4% annually over the coming years, in line with the growth in nominal wages.
“The common thread is clear: high-quality assets in markets with limited supply are well placed to deliver sustained long-term returns”, said Vanessa Gelado, senior managing director and head of Hines in Southern Europe.
HEREP IV follows on from HEREP III, which exceeded its fundraising target in 2023 by raising more than €1.6 billion in capital commitments. With this fourth edition, the HEREP series is set to approach €5,000 million in committed capital across its various vehicles.
The fund is managed by Methan Milkhu and forms part of Hines’ global investment platform, which pursues core, core-plus, value-add and opportunistic strategies in Europe, the Americas and Asia-Pacific.
