Hines Eyes New Profits as Global Development Rebounds

Supply Shortages Reshape the CRE Playbook

After years where most headlines focused on falling global CRE investment volumes, it’s the drastic contraction in new development that could shape the sector’s next few cycles. According to Bisnow, Hines—the $92B global property giant—is intensifying its development push as project viability returns to the market. Hines Managing Partner and co-head of Investment Management Alfonso Munk said that with stabilized construction costs and motivated lenders, ground-up development is once again in the money for well-placed projects.

Pandemic-era cost spikes and volatile interest rates sidelined new construction and rendered development margins razor-thin for years. But Munk argues that the combination of curtailed supply and sticky demand is starting to push rents high enough to pencil fresh projects. For Hines, the key is targeting sectors and locations where these supply-demand mismatches are most acute and competition is still catching up.

The Details

Munk told Bisnow that Hines is looking to capitalize on places where a “scarcity advantage” has emerged—meaning suppressed supply, resilient demand, and a basis reset that enables profitable development. Data supports the opportunity: US industrial starts are down 60% from their 2022 peak, per Cushman & Wakefield, while London office construction has halved since 2023, according to Deloitte. JLL notes that European multifamily development investment is down 20% over three years, pushing residential building to a 20-year low.

Rent growth is finally catching up. JLL data shows European multifamily rents have climbed 5% on average, while CBRE found UK retail parks saw 5% rent growth and US grocery-anchored retail climbed about 3% in 2025. Hines’ newest bets include four residential sites in Prince William County near D.C. (with capacity for 1,000 units) and the acquisition of a central Paris office building for redevelopment.

From Permits to Profits: A Market Turns

The market’s pullback from new starts has recreated classic supply-demand imbalances in CRE. Industrial and Sun Belt multifamily were notable exceptions—where pipeline projects barreled ahead—but even there, new activity is ebbing. Across Europe, residential development is especially tight, with JLL highlighting the Nordics as particularly attractive for Hines.

On the industrial side, continued e-commerce demand and the need to upgrade obsolete assets are additional pull factors. Data center development remains a theme, with Hines often opting to position sites, secure power, and entitlements, but leaving vertical construction to specialists—a strategy to derisk while capturing value from project expertise. Amid suppressed starts, even sectors like retail are starting to see new money chase growing rents—an unfamiliar signal after years of malaise.

Why It Matters

The implications of Hines’ shift go beyond a single operator’s calculation. Per Cushman & Wakefield, US industrial development has declined 60% since 2022. Fewer new facilities will hit the market just as demand is proving resilient. In Europe, residential construction is running at a 20-year low, per JLL. This sets up continued rent pressure, particularly in undersupplied Nordics and major metros.

As more institutional investors recognize these supply-demand mismatches, competition for viable development sites is likely to intensify. Hines has also identified supply shocks as creating attractive entry points across real assets. With capital costs stabilizing and rents rebounding, lender sentiment may improve and support a wider construction recovery. Hines’ scale and local teams across 30 countries could give it an advantage. Meanwhile, the window for outsized development profits may not stay open long.

Munk’s emphasis is on timing. In development, profits accrue to those who enter before the market consensus is clear. Execution capability now matters more across site selection, entitlement, and project management. For Hines, the opportunity lies where suppressed supply and rising rents finally intersect.

What’s Next

Looking ahead, Hines expects its development pipeline to grow, with European housing, US industrial, and select data center sites in focus. If rents and demand remain steady, more investors could revive or launch projects sidelined since 2022. Still, with construction input costs stabilizing (but not reverting), and lenders re-engaging in ground-up deals, the next wave of supply may take 18–36 months to materialize.

The key risk for Hines and its peers: being too late to the next development cycle. As profitability returns to the market, developers with robust research, local insights, and execution skill are best positioned to capture the “scarcity premium”—before it’s priced away.