AI-Driven Mild Job Losses Set to Limit Office Demand in Asia-Pacific

According to a report published by real estate consultancy CBRE, as companies increase their use of artificial intelligence, mild job losses will occur in the Asia-Pacific region, which will negatively impact the growth of office space demand in the coming years.

Developed and Developing Markets

The report stated that 3.9% of office jobs in developed markets such as Hong Kong, Singapore, Japan, South Korea, Taiwan, Australia, and New Zealand are vulnerable to AI-induced displacement.

It was stated that this rate will remain at only 1.7% in developing markets such as mainland China, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

Office Space Growth Expectations

Ada Choi, head of Asia Pacific research at CBRE, said that occupied office space will continue to grow through 2030 even under a moderate displacement scenario, but this growth will occur at a slower pace.

It was emphasized that with a 5% lower growth compared to the baseline, the rate will slow down to 13% by 2030, and that this is a downside sensitivity analysis rather than a collapse prediction.

Different Scenarios by Country

While most markets in the region were evaluated under the moderate displacement assumption, it was conveyed that Japan could be included in the slow displacement scenario due to organizational and cultural barriers.

It was noted that mainland China could face a rapid displacement scenario where professions highly vulnerable to AI are automated within the shortest modeled timeframe.

Market Dynamics and Compensating Factors

It was explained that labor markets in Hong Kong and other advanced economies have high office employment density, relatively high costs, and strong digital preparedness.

It was stated that the main factor capable of offsetting AI disruptions is slowing supply, with a warning that this situation could increase market polarization in Hong Kong.