KUALA LUMPUR: Artificial intelligence (AI) is expected to moderate office-space demand growth across Asia Pacific, but expanding economies, workplace changes and a shrinking supply pipeline should help keep the market resilient, according to CBRE.
In its latest research, CBRE projected occupied office space across the region to grow 13 per cent between 2026 and 2030 under a moderate AI displacement scenario, compared with 18 per cent under its base-case forecast.
The analysis found that occupations facing a meaningful risk of displacement by AI account for only 1.8 per cent of total employment in the region, while another 8 per cent of the workforce is potentially exposed but could adapt through reskilling or moving into other roles.
CBRE head of leasing, Asia Pacific, Tom Gaffney said AI should be viewed as a force reshaping jobs and workplace requirements rather than simply eliminating employment.
"AI is often viewed through the lens of job displacement, but the bigger story is how it will reshape work rather than eliminate it," he said.
As automation takes over routine tasks, collaborative and client-facing activities are expected to become more important, influencing how businesses design and allocate office space.
Gaffney said around half of occupiers intended to expand their real estate footprint over the next three years, highlighting the resilience of office demand despite the prospect of AI moderating employment growth in some sectors.
In developed markets, office demand is expected to recover as companies increase workplace attendance and replenish space following years of portfolio optimisation. Occupied office space in these markets is projected to grow 5 per cent between 2026 and 2030 under the moderate AI displacement scenario.
Developing markets, including mainland China, India and Southeast Asia, are expected to record stronger growth, supported by expanding service industries and demand for institutional-grade offices.
CBRE projects occupied office space in these markets to expand by 19 per cent through 2030 under a moderate AI displacement scenario, reflecting stronger structural demand despite technological disruption.
MALAYSIA'S AI AMBITIONS CREATE NEW OPPORTUNITIES
Malaysia's growing AI ecosystem could generate demand for technology-related businesses and skilled employment, extending the benefits of digital investment beyond data centre infrastructure.
YTL Power International Bhd is developing its AI capabilities through YTL AI Cloud, which provides computing infrastructure, and YTL AI Labs, which develops locally tailored AI models under its ILMU initiative.
Telekom Malaysia Bhd is also investing in AI-ready data centres, computing infrastructure and enterprise solutions. Its TM AI Foundry supports AI application development and commercialisation, while its TM Nxera joint venture is developing an AI-ready data centre campus in Iskandar Puteri, Johor.
CBRE said these developments reflect the growing role of AI across Malaysia's digital economy, spanning computing infrastructure, locally developed models and business applications.
The wider investment trend also includes global technology companies such as Amazon Web Services, Microsoft and Google, which have established or expanded data centre and cloud infrastructure operations in Malaysia to serve growing regional demand for digital services.
AI BOOM COULD LIFT OFFICE/HOME DEMAND
For the property sector, these investments could support office demand from technology developers, engineers, research teams and professional services. However, data centre investment does not automatically translate into equivalent office-space demand.
CBRE said the benefits will depend on how much investment generates local research, software development, skilled jobs and supporting business activities.
AI is also creating new opportunities in residential property, with i-Berhad developing i-Ris, the Master Butler of AI Living, to make homes more intuitive, connected and responsive to residents' needs.
Designed as a unified interface, i-Ris aims to coordinate smart-home systems, intelligent services and compatible robotics, reducing the need for residents to manage multiple applications and devices.
The concept revolves around three elements: i-Ris as the brain, robotics as the hands, and AI Living as the overall experience.
For instance, residents returning home after a tiring day could tell i-Ris how they feel, allowing it to coordinate available systems to create a more comfortable environment. Potential applications include lighting, climate control, security, energy management, wellness-related services and robotic assistance, subject to technical integration and availability.
The initiative builds on i-Berhad's development of i-City in Shah Alam, a 72-acre integrated township encompassing residential, commercial, retail, hospitality and leisure components.
A key milestone was the opening of the AI World Experience Centre on Jan 13, 2026. The centre showcases robotics applications, with more than 100 robots featured or deployed across its experience areas. AgiBot is among the robotics partners supporting the broader AI Living vision.
i-Berhad plans to introduce i-Ris across approximately 500 residences, with completion targeted for 2030.
The Group also aims to develop a residential platform that can accommodate evolving AI and robotics capabilities, subject to compatibility, maintenance, commercial arrangements and technical requirements.
For i-Berhad, AI Living goes beyond installing smart devices or robots in homes. It seeks to integrate intelligent technologies into everyday living, supported by i-City's existing urban ecosystem and a growing network of technology partners.
The project's success will depend on translating this vision into practical, reliable and integrated services as development progresses towards its targeted 2030 completion.
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SHRINKING SUPPLY PIPELINE LIMITS OVERSUPPLY RISK
CBRE said the impact of AI on office markets is also expected to be cushioned by a declining development pipeline, reducing the risk of a significant supply-demand imbalance across the region.
Elevated construction and financing costs, coupled with greater market uncertainty, have prompted developers to delay or scale back projects.
As a result, annual office completions are forecast to fall to the equivalent of just 3.2 per cent of existing stock by 2028, compared with 5.3 per cent before the pandemic in 2019.
CBRE head of research, Asia Pacific, Ada Choi said the combination of moderating demand growth and constrained new supply was expected to help maintain market stability.
"Even if AI moderates office demand growth, we do not foresee a major supply-demand imbalance emerging in Asia Pacific. 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."
The region's office market fundamentals are expected to remain broadly resilient under both CBRE scenarios.
Under the base-case forecast, the regional office vacancy rate is projected to edge down from 16 per cent in the second quarter of 2026 to 15 per cent by 2030.
Even under a moderate AI displacement scenario, vacancy is projected to rise by only three percentage points above the baseline forecast, suggesting that AI is more likely to moderate office demand growth than trigger widespread oversupply across Asia Pacific.
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