Will AI adoption shrink office space? Asia-Pacific firms are on the fence in survey

A recent survey by CBRE has revealed that a significant portion of Asia-Pacific companies are uncertain about the impact of artificial intelligence (AI) on their office space requirements. The study, which polled corporate real estate executives across nine markets, found that 20% of respondents believe AI adoption will lead to reduced real estate needs.

Meanwhile, 56% of participants held a neutral stance, asserting that AI has no impact or that its effects are too early to determine. Only 25% were convinced that AI adoption would necessitate an expansion of office space. Conducted between May 26 and July 10, the survey received 651 responses, with greater weighting given to those from mainland China and India, reflecting their share of Asia-Pacific grade A office stock.

Despite the speculation that AI could reduce office demand, most organizations remain in the early stages of assessing its impact, with minimal short-term effects on real estate requirements, according to Ada Choi, head of research for Asia-Pacific at CBRE. Many occupiers continue to plan for business expansion, prioritizing higher-quality workplaces and rationalising lower-value space as companies rebalance their office portfolios.

Tom Gaffney, CBRE's head of leasing for Asia-Pacific, noted that while AI has been linked to workforce reductions and office space downsizing, recent data shows that employees are still working in the office at least three days per week, indicating a stabilization of office attendance. Companies are now focusing on transforming the workplace to improve experience and efficiency, marking the emergence of a new equilibrium for the office market, with selective portfolio growth and a preference for premium workplaces.