AI IMPACT: OFFICE Prime CBD office vacancy rate*
• Office is the asset class with the widest scenario dispersion, because demand, driven by office employment, is amongst the most exposed to both the upside and downside risks from AI. • Supply helps to limit any upside risk to vacancy across all scenarios: over the next five years average annual prime supply is forecast to be less than half of what it was over the previous five in the baseline scenario. • A near-term supply-freeze combined with a surplus of employment growth benefits the expansion scenario as existing space is quickly absorbed, and prime vacancy falls below 5% by 2033.
2025 2026F 2027F 2028F 2029F 2030F
S1: Upside - Expansion
14.3% 14.1% 13.7% 11.4% 10.0% 7.8%
14.3% 14.4% 14.3% 12.3% 11.2% 9.0%
S2: Baseline
S3: Downside - AI Bust
14.3% 15.7% 17.4% 16.2% 15.9% 13.5%
S4: Downside - Displacement
14.3% 15.1% 16.1% 15.9% 16.9% 17.6%
*Includes Adelaide, Brisbane, Canberra, Melbourne, Perth and Sydney Source: Cushman & Wakefield Research
Cushman & Wakefield
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