Unpacking real estate trends with AEW's Hans Vrensen

Amidst the characteristic buzz of the Palais des Festivals and the occasional interruption of a nearby samba band, the mood at MIPIM 2026 is one of cautious evolution.

Hans Vrensen

Hans Vrensen, head of Research & Strategy for AEW in Europe, sat down with CRE Media Europe to discuss how the market is navigating recent volatility in the Middle East and why the "death of the office" may have been prematurely reported.

"We don’t expect a massive negative impact, particularly because there has been a building strength in most occupier markets," Vrensen noted. "I don’t think the ongoing events in the Middle East will really change most of these longer-term trends. But they will continue to trigger some volatility in the energy and financial markets in the short term, of course."

Perhaps one of the key takeaways was the improving outlook for the office sector—an asset class many had written off in the post-pandemic era. According to Vrensen, the trend is "improving" regarding vacancy rates, driven by two primary factors: a backtrack on post-Covid space cuts from occupiers and a significant squeeze on new supply.

This supply-demand imbalance started in the prime CBD sub-markets but is now creating a "favourable" environment for landlords even in CBD-adjacent markets. This positive moment in the occupier market is also leading investors to adjust their pricing as they had previously priced in overly negative scenarios.

The logistics sector continues to benefit from structural tailwinds, including e-commerce penetration and the "near-shoring" of supply chains. The current disruption of the Suez Canal supply chains, if sustained, could force a return to the "just-in-case" inventory strategy first seen during the pandemic. "Back then, the many occupiers switched from the efficiency of just-in-time to the security of just-in-case," Vrensen said, referring to tenants taking extra warehouse space to hedge against shipping delays to ensure deliveries could continue.

Despite logistics vacancy rates hitting a record high of 5% across Europe, Vrensen expects most investors to remain unfazed, noting that the tapering of new supply, driven by the high and increasing construction costs, is expected to stabilise the market and bring vacancy rates back down.

For investors looking to protect themselves against interest rate hikes and future yield shifts affecting their returns, Vrensen identified five specific sub-sectors across Europe that appear most "insulated" due to their reliance on existing rents and rental growth rather than yield tightening: UK offices, UK shopping centres, Spanish offices, Spanish shopping centres, and Dutch offices.

As the second day of the conference unfolded, Vrensen described the atmosphere as "mixed". While the industry is eager to "feel the positive energy of spring", the reality of legacy debt and fund restructurings and extensions remains to be dealt with.

"The industry continues to work out legacy debt situations by restructuring existing capital stores ... this in part offsets the positive debt trends of solid availability through increased use of back leverage backing an increasing number of debt funds."

Branislav Pekic