Cushman & Wakefield has published a study arguing that artificial intelligence will lift economic growth and commercial real estate demand across Asia Pacific. The report examines how different AI adoption scenarios could affect office, industrial and retail markets in the region.
The analysis suggests AI is more likely to expand demand for physical space than reduce it. Stronger economic output, new business formation and AI-related investment should support higher occupancy over time, even as some routine tasks are automated.
That conclusion runs counter to a common concern in property markets that automation could weaken demand for workplaces and other commercial assets. Instead, the consultancy's modelling points to AI as a net positive for both economic activity and property demand across Asia Pacific.
"There is a misconception that AI will reduce the need for physical space," said Dr. Dominic Brown, Head of International Research, APAC & EMEA, Cushman & Wakefield. "Our analysis shows the opposite - AI expands economic activity and that ultimately drives greater demand for real estate across sectors."
Four scenarios
The study tests four scenarios covering different combinations of AI adoption, productivity gains and labour market outcomes over the coming decade. The baseline case, which the firm assigns a 50% probability, assumes gradual adoption and moderate productivity gains that support steady economic expansion.
A second scenario, described as productivity-led expansion and assigned a 15% probability, assumes faster AI uptake that drives stronger growth and job creation. The study also models two weaker scenarios: an AI bust with a moderate recession, given a 25% probability, and a dystopic displacement case, given a 5% probability, in which AI replaces labour more heavily and leaves demand under pressure for longer.
Under the baseline view, the Asia Pacific economy is projected to grow by about 3% to 4% a year through 2030. Growth would be supported by AI-driven productivity gains and continued investment in infrastructure, including data centres and power.
"AI will be a critical force in sustaining APAC's long-term growth story," said Dr. Brown. "It will help offset demographic headwinds in some developed markets while accelerating productivity across emerging economies."
The employment outlook in the baseline scenario also remains positive. The study projects a net increase of 58.5 million jobs across Asia Pacific between 2026 and 2030, though growth is likely to moderate over time as economies mature and work shifts towards higher-value, knowledge-based roles.
Property effects
For commercial real estate, the report argues that AI should add to demand rather than displace it. The effect, however, will not be uniform, with stronger performance expected in some asset classes and locations than in others.
Office markets are forecast to change in character rather than face broad disruption. In the baseline scenario, prime net absorption of office space is projected to reach 1.035 billion sq ft over the next decade, with demand increasingly concentrated in higher-quality, more flexible buildings in prime locations.
This is expected to widen the existing divide between premium and lower-grade offices. In practice, landlords with well-located buildings designed for collaboration may benefit more than owners of older stock that does not match tenant preferences.
Industrial and logistics property is identified as one of the main beneficiaries of AI adoption. Under the baseline case, prime net absorption in the sector is forecast to reach 2.542 billion sq ft by 2030, driven by automation, eCommerce and more complex supply chains.
Within that segment, data centres stand out as a central theme. The report describes them as critical infrastructure for AI-led growth and says power availability is becoming a key constraint shaping supply and investment decisions.
Retail is expected to see a more uneven outcome. Stronger income growth should support consumer spending, but the market is likely to become more polarised, with high-end and low-end formats outperforming while mid-tier retail faces structural pressure.
Investment view
The report also considers the implications for investors. In the baseline scenario, core real estate returns are projected to stabilise at about 10%, supported by regional growth and shifting demand patterns.
Investors will need to pay closer attention to how AI changes occupier needs, where infrastructure bottlenecks emerge and which asset classes gain strategic importance. Data centres, in particular, are expected to become more prominent in portfolios as demand for digital infrastructure rises.
At the same time, the consultancy cautions that the outlook remains sensitive to whether AI delivers the expected productivity gains and how labour markets absorb the change. If those benefits arrive more slowly, or if employment disruption is greater than expected, vacancy rates could rise and rents could come under pressure.
The study's modelling framework tracks the effects of AI from factors such as regulation, electricity supply and data centre development through to adoption, productivity, macroeconomic outcomes and property market responses. It is also tied to the firm's wider economic forecasting process, which takes account of monetary policy, trade conditions and geopolitical risks.
That broader approach reflects uncertainty over how quickly companies will use AI in day-to-day operations and how successfully they will turn productivity gains into revenue growth. For landlords, occupiers and investors, the central message is less about a single forecast than preparing for a wide range of outcomes.
"While the base case is constructive, the range of outcomes remains wide. Understanding the different scenarios is critical for both occupiers and investors as they plan for the next decade," said Brown.