How is AI reshaping office demand in Australia and New Zealand

The global rise of Artificial Intelligence (AI) is fundamentally reshaping white-collar labour markets and driving tangible changes in office demand. In leading hubs such as San Francisco, New York and London, AI companies have accounted for a significant share of recent office leasing, often occupying premium grade space, with leasing volumes accelerating in the last two years. As back-office roles are automated, the proportion of knowledge workers and innovation-based occupiers has grown. Knowledge workers now constitute more than 42% of the U.S. office workforce, up from 29% in 2011.

Australia's knowledge workers represent approximately 40% of the workforce, mirroring the U.S., and highlighting comparable workforce composition. This report assesses AI's dual impact on Australia's office and labour markets, with a comparative analysis of Auckland, NZ. By adopting key scenarios, we explore how AI simultaneously drives new office demand while reshaping white-collar work. The net labour impact is a function of how these forces combine. Our analysis assesses four distinct trajectories, each with varied implications for office space demand.

AI drives global office demand through both headcount growth and the creation of new, collaborative job types. This expansion concentrates in precincts offering the infrastructure required by scaling technology businesses, including connectivity, talent, and flexible, high quality floorplates. At the asset level, these dynamics create divergent outcomes driven by asset quality, location, and a city's white-collar employment mix.