Will AI boost or displace commercial real estate demand in APAC?

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AI is projected to boost commercial real estate demand across Asia Pacific.

Artificial intelligence (AI) is anticipated to fuel economic expansion and subsequently increase the demand for commercial real estate throughout the Asia Pacific (APAC) region, rather than leading to its displacement. A study by Cushman & Wakefield indicates that AI will act as a net positive for both economic growth and real estate requirements. This projection is based on the understanding that AI expands economic activity, which in turn drives greater demand for real estate across various sectors.
Economic Expansion Fueled by AI

Under a baseline scenario, the APAC economy is expected to experience annual growth of approximately 3-4% through 2030. This expansion is attributed to AI-driven productivity gains and continued investments in critical infrastructure such as data centers and power facilities. Dr. Dominic Brown, Head of International Research, APAC & EMEA at Cushman & Wakefield, noted that AI is poised to be a significant factor in sustaining APAC's long-term growth trajectory, helping to counterbalance demographic challenges in developed markets and accelerate productivity in emerging economies.
Job Growth and Occupancy Needs

Contrary to concerns about AI leading to widespread job losses, the analysis suggests that overall employment in APAC is projected to increase. Specifically, a net rise of 58.5 million jobs is anticipated between 2026 and 2030 under the baseline scenario. This increase in economic activity and business formation is expected to translate into higher occupancy needs for commercial real estate. The study posits that AI's impact on real estate will be additive, meaning it will contribute to demand rather than substitute for existing space requirements.
Sector-Specific Demand Projections

The office market is expected to see prime net absorption reach 1.035 billion square feet over the next decade, with a growing preference for high-quality, flexible spaces in prime locations. The logistics and industrial sector is identified as a primary beneficiary, with prime net absorption forecast to reach 2.542 billion square feet by 2030, driven by automation, e-commerce, and supply chain complexities, highlighting data centers as crucial infrastructure. The retail market, however, is predicted to become more polarized, with high and low-end segments outperforming mid-tier offerings due to evolving consumer landscapes.

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Will AI boost or displace commercial real estate demand in APAC?

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