AI job losses set to rein in office demand in developed Asia-Pacific economies: report
A mild displacement of jobs across the Asia-Pacific region as companies expand their use of AI would trim five percentage points off growth in office space demand in the next few years, according to property consultancy CBRE. In a report released on Thursday it said 3.9 per cent of office jobs were vulnerable to artificial intelligence-driven displacement in developed markets in the region,…
A recent report by property consultancy CBRE suggests that the adoption of AI could lead to a significant decline in office space demand across developed economies in the Asia-Pacific region. According to the report, 3.9% of office jobs in developed markets, including Hong Kong, Singapore, Japan, South Korea, Taiwan, Australia, and New Zealand, are vulnerable to AI-driven displacement.
However, only 1.7% of jobs in developing markets, such as mainland China, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, are similarly at risk. Despite this, CBRE's head of Asia-Pacific research, Ada Choi, stated that office space demand is still projected to grow, albeit at a slower pace of 13% by 2030, which is five percentage points less than the base case scenario that assumes firms incorporate AI-related productivity gains without job displacement.
The model also does not account for potential upside from new AI-related companies, occupations, and business formation. Most Asia-Pacific markets are expected to fall under the moderate displacement assumption, while Japan is likely to fall under a slow displacement scenario due to organizational and cultural barriers to change.
China, on the other hand, could fall under a rapid displacement scenario, with all identified occupations automated over a short time frame. Office employment is expected to expand under both scenarios, but slowly, by a total of 2% between 2025 and 2030 in the rapid displacement scenario. Developed economies in the region are characterized by a high concentration of office-based employment, relatively high labor costs, and strong digital readiness, making them more sensitive to AI-related displacement.
One potential stabilizing factor is slowing supply, as forecasted annual office completions in 2028 would only account for 3.2% of the estimated stock in the region next year, a significant decrease from the 5.3% seen before the Covid-19 pandemic. However, AI could intensify market polarization in Hong Kong, with top-tier locations like Central attracting more leasing demand.
Choi stated that AI is unlikely to be the primary driver of office market weakness in Hong Kong, but rather, it is likely to accelerate the divergence between prime and secondary assets that is already evident.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
