Asia Pacific Office Demand Expected to Remain Resilient Despite AI Adoption: CBRE

AI is expected to reshape how people work across Asia Pacific, but demand for office space is likely to remain resilient. Even under a moderate AI displacement scenario, occupied office space is forecast to grow by 13% between 2026 and 2030, only modestly below the 18% growth projected under the base-case scenario, according to CBRE's latest research.

CBRE's analysis indicates that occupations facing meaningful displacement risk from AI account for just 1.8% of total employment in the region. While a further 8% of the workforce is potentially exposed to AI, many workers are expected to adapt through reskilling and occupational mobility. 

“In Hong Kong, AI is expected to complement rather than replace the role of the workplace and office demand. Instead, it is likely to strengthen the importance of high-quality workplaces that foster team productivities, creativities and client engagement,” said Ada Fung, Chief Operating Officer, Advisory Services, CBRE Hong Kong. “As AI becomes increasingly embedded into business operations, occupiers will place greater emphasis on office quality rather than simply the amount of space they occupy.  We expect demand to gravitate towards premium buildings that offer modern specifications, strong sustainability credentials and amenities that support productivity and talent attraction. This will further reinforce the flight-to-quality trend that is already shaping Hong Kong's office market.”

AI is expected to influence where occupiers choose to locate. Demand is likely to become increasingly concentrated in premium office buildings that support collaboration, innovation, and technology-enabled work. This is expected to accelerate flight-to-quality trends, strengthening the competitive position of premium assets while widening the performance gap with secondary buildings. Owners of lower-quality properties may face growing pressure to upgrade and reposition their assets or pursue alternative uses for them. 

Distinct Growth Drivers Underpin Office Demand Across APAC

In Hong Kong, occupiers are increasingly viewing real estate as a strategic tool to support talent attraction, collaboration and business performance. As AI adoption accelerates, demand is expected to remain concentrated in premium office buildings with modern specifications, strong ESG credentials and high-quality workplace environments, further supporting flight-to-quality leasing activity.

The drivers of office demand growth vary across Asia Pacific. In developed markets, such as Australia, Hong Kong SAR, Japan, Singapore, and South Korea, occupiers are expected to replenish space after several years of portfolio optimisation during the pandemic, when occupied office space growth lagged office employment growth. As workplace attendance rises and companies place greater emphasis on employee experience, occupiers are expected to increase space allocation, supporting 5% growth in occupied office space between 2026 and 2030 under a moderate AI displacement scenario.

By contrast, office demand in developing markets, including Mainland China, India, and Southeast Asia, is being supported by structural economic upgrading, including the expansion of tertiary industries and the migration to institutional-grade office. These long-term shifts are expected to underpin continued demand, with occupied office space projected to grow 19% in developing markets through 2030, even under a moderate AI displacement scenario.

Shrinking Supply Pipeline Limits Risk of Oversupply

AI is also unlikely to create a significant office oversupply challenge across the region. Elevated construction and financing costs and greater uncertainty have already led developers to delay or scale back projects. As a result, the development pipeline is shrinking, with annual completions forecast to fall to just 3.2% of Q4 2027 stock in 2028, down from 5.3% before the pandemic in 2019.

“Even if AI moderates office demand growth, we do not foresee a major supply-demand imbalance emerging in Asia Pacific,” said Ada Choi, Head of Research, Asia Pacific for CBRE. “At the same time, a shrinking development pipeline is expected to help support market balance and relatively stable vacancy levels throughout the remainder of the decade.”

Asia Pacific office market fundamentals are expected to remain resilient under both scenarios. Under CBRE’s base-case scenario, vacancy is forecast to edge down from 16% in Q2 2026 to 15% by 2030. Even under a moderate AI displacement scenario, vacancy is projected to rise by only three percentage points above the baseline forecast.


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