
European real estate, and the unique value it offers for global investors, was the focus of a Nareit REITweek 2025 panel. Trends in the office, retail, and residential sectors—and the importance of quality assets—were among the key points of discussion.
Cedrik Lachance, director of research at Green Street, moderated the panel that featured: Mark Allan, CEO of Landsec (XLON: LAND); Ismael Clemente, CEO of MERLIN Properties SOCIMI, S.A. (MC: MRL); Philip Grosse, CFO of Vonovia SE (FRA: VNA); Pere Viñolas, CEO of Inmobiliaria Colonial (BME: COL); and Jean-Marie Tritant, CEO of Unibail-Rodamco- Westfield (Euronext Paris: URW).
“It’s never been more important to own the right real estate,” said Allan, referring to the company’s focus on London office and U.K. shopping centers. He noted that the REIT’s portfolio is 98% occupied in London, with demand “very much concentrated in the top end.”
Flexible working is here to stay, he said, but it has also led to a desire for the very best space to encourage workers to come into the office. Since 2016, Allan added, there has also been a sustained slowdown in new supply, which “isn’t going to change anytime soon.”
Colonial’s Viñolas noted that super prime office space is “performing really well,” with 100% occupancy in Paris, and more than 95% occupancy in Madrid.
Clemente at Merlin noted that the dynamics are “pretty robust” across its markets, with office occupancy seeing a significant recovery, in part due to office-to-residential conversions depleting b- and c-class office stock.
In retail, Tritant stressed the importance of quality assets and locations in all types of markets. He noted that Unibail-Rodamco-Westfield focuses on ensuring that it gets rid of any poor performing retailers that bring little to an asset, and replacing them with new concepts. He also explained that the REIT decided to retain its flagship locations in the United States based on the quality of their locations. The properties are in eight affluent markets with untapped land value, he said.
Allan pointed out that in the U.K., a rise in fulfillment costs due to an increase in the minimum wage has led to retailers increasing store footprints in the best locations and using that space not only as a sales channel but to support their omnichannel platform. He described these trends as long term, likely in the five to 10-year range.
Clemente added that the inclination of its clients in the retail space to accept rent increases is high. ‘We are selling per square meter like we never sold.’
On the residential side, Grosse said that market rents on average are twice as high as regulated in-place rents, which gives him “very long-term visibility on the growth trajectory.” He noted that in Berlin, market rents are 170% higher than in-place rents, and the story is very similar in other metropolitan areas. "I don’t really see anything changing anytime soon,” he said, due to the supply/demand imbalance.
Meanwhile, Viñolas discussed the company’s pivot toward life science, saying that Europe is pursuing growth and investment in innovation.