Job automation to reshape office demand: CBRE

Job automation to reshape office demand: CBRE

10 August 2017

The adoption of digitisation and use of artificial intelligence will have a strong bearing on the future of office jobs across a number of different sectors, declares a new report from CBRE Research.

The report How Job Automation Will Reshape Corporate Office Demand in Asia Pacific notes that algorithms and artificial intelligence programs are increasingly being used in the insurance, finance, legal, and media sectors.

A 2016 Australian Government report found that 44 per cent of Australian jobs are at risk of computerisation and automation.

While this trend will require more IT workers, it will likely eat into administrative roles, many of which take up a large volume of office space.

For example, the CBRE report estimates that automation will put at risk demand for approximately 18 per cent of existing U.S. office stock.

What about in the Asia-Pacific region? CBRE Research expects the following impacts:

1. Slower growth in net office demand

Job automation will not cause mass unemployment, but technology is likely to see overall demand for pure office space moderates in the coming years.

More mobile and activity-based work will contribute to this reduction, while cloud computing will also reduce the need for servers and storage space.

2. Back-offices hit the hardest

Job automation will have the strongest impact on administrative jobs.

However, it will have a limited impact on the CBD areas of core office markets, as space in such locations is predominantly utilised for front-office and client facing positions, which cannot be automated or computerised.

3. Stronger demand for data centres and innovation laboratories

Many multinationals are already locating staff in innovation centres or co-working centres to facilitate collaboration and expose them to new ideas.

The adoption of cloud computing is spurring demand for data centres at the expense of space for servers and data storage within corporate offices.

4. More robust IT infrastructure in buildings  

The growth in the number of technology jobs, as well as the greater number of jobs that will be enabled by technology, will require buildings to have higher quality IT infrastructure.

Older buildings, or those properties not meeting corporate IT infrastructure requirements, will be less competitive and are likely to struggle to attract and retain tenants.

5. Transformation of CBD office space  

The positive outlook for high value sales and management jobs will ensure stable demand for offices in CBDs or core areas.

However, workplace transformation will continue as companies adopt workplace strategy to foster innovation and collaboration across different disciplines and business units.  

6. Deeper emphasis on office placemaking  

Greater competition among landlords seeking to attract and retain quality tenants will prompt developers to design office buildings with smart building technology, food and beverage outlets, end-of-trip and wellness facilities.

While core areas of major office markets in Asia Pacific are likely to remain resilient, job automation is set to have a far reaching—albeit nuanced—impact on corporate real estate demand in the coming years.