Artificial intelligence will change the office market less through an abrupt decline in space than through an increasing polarization between high-quality, adaptable properties and structurally vulnerable portfolios. This is the conclusion of PTXRE's current white paper "Artificial Intelligence, Labor Market and Office Market - Evidence Situation 2025 - 2026 and Possible Implications for Office Investors".
The evaluation of international studies and current labor market data shows that AI has so far led to a transformation of task profiles rather than to a nationwide substitution of office jobs. Routine-intensive office and administrative activities are particularly exposed, while knowledge-intensive functions – such as in the areas of data, software, AI, cybersecurity and governance – continue to gain in importance.
The white paper recommends that investors use transparent scenario logic with base, best, and worst-case assumptions, as well as explicit modeling of tenant exposures, workplace strategies, and CapEx options.
"The serious evidence does not support a short-term 'office dies' scenario or a development without structural breaks," says Andreas Trumpp, Head of Market Intelligence & Foresight at PTXRE. "More likely is an accelerated reallocation of tasks and skills within office employment. This does not primarily have blanket area effects, but above all qualitative consequences."
A key finding of the analysis is that future demand for office space cannot be derived linearly from the employment figures. It arises from the interplay of office employment, space efficiency (square metres per workplace), intensity of use (hybrid models) as well as quality and location preferences. AI potentially affects all four factors at the same time.
"For investors, it is not so much a striking percentage figure that is decisive as the ability to analyze tenant and functional profiles in a differentiated way," explains Trumpp. "Whether a property will come under pressure in the future or benefit from the transformation depends largely on which activities are bundled there and how flexibly buildings can react to changing workplace strategies."
The most likely scenario is a further increase in quality and location polarisation: Prime properties in well-connected, talented and skilled cities and locations with high ESG performance and flexible floor plans are likely to be resilient and generate comparatively secure cash flows. Secondary, less flexible stocks, on the other hand, carry an increasing risk of CapEx and obsolescence.
