AI‑Driven Job Displacement Could Cut Asia‑Pacific Office Demand by 5%

Beijing, China – A CBRE analysis released on Thursday indicates that artificial intelligence could displace 3.9% of office jobs in developed Asia‑Pacific markets, leading to a projected 5% decline in office space demand growth over the next few years.

The report, which covers Hong Kong, Singapore, Japan, South Korea, Taiwan, Australia and New Zealand, highlights the growing role of AI in routine administrative tasks and its potential to reduce the need for traditional office roles.

AI Displacement and Office Demand

The CBRE report, titled Asia‑Pacific Office Market Outlook 2024, identifies AI‑driven automation as a key driver of workforce change. By 2027, the study projects that AI will reduce the need for routine clerical and support roles, which currently account for roughly 20% of office employment in the region. The displacement is expected to translate into a 5% contraction in office demand growth, from an estimated 3.5% in 2024 to 2.5% in 2027.

The analysis also notes that the impact will be uneven across markets. Hong Kong and Singapore, with high technology penetration, are likely to see the steepest declines, while Australia and New Zealand may experience more modest shifts due to diversified economies.

Regional Impact

In Hong Kong, the report projects a 2.1% decline in office demand for 2025, driven by a 3.5% reduction in new office openings and a 1.8% drop in lease rates. Singapore’s office market is expected to contract by 1.9% in 2025, with a 4.2% decline in new office supply. Japan, South Korea and Taiwan are projected to see 1.5% to 2% declines, reflecting slower AI adoption in traditional sectors.

Developers in Australia and New Zealand are already testing flexible workspaces that incorporate AI‑enabled meeting rooms and automated facilities management. These innovations aim to offset the reduced demand for traditional office footprints.

Implications for Real Estate

The projected contraction in office demand signals a shift toward more flexible, technology‑enabled spaces. Investors may prioritize properties with high digital infrastructure, such as 5G connectivity and AI‑powered building management systems. Lease terms could become more tenant‑friendly, with shorter commitments and shared‑space models.

The report also suggests that property valuations in high‑tech hubs could adjust, with price‑to‑rent ratios tightening by up to 3% in the next three years. Commercial lenders may reassess risk profiles for office portfolios, especially in markets with high AI adoption.

Strategic Outlook

For developers, the key to resilience lies in diversification and technology integration. Projects that incorporate modular design, AI‑driven energy management and hybrid work capabilities are likely to attract tenants seeking cost efficiency and future‑proofing. Meanwhile, investors should monitor AI adoption rates and adjust exposure to office assets accordingly.

CBRE’s findings underscore the broader trend of AI reshaping the workplace, prompting a reevaluation of real‑estate strategies across the Asia‑Pacific region.

Sources

• CBRE Asia‑Pacific Office Market Outlook 2024
• SCMP: AI job losses set to rein in office demand in developed Asia‑Pacific economies
• CBRE Global Office Market Outlook 2024