AI is reshaping property demand, but not evenly, new JLL research finds

Artificial intelligence is changing the way people work, and its effects are flowing into commercial property in ways that differ markedly from one market and industry to the next, according to new research from Property Council New Zealand member JLL.

The report, Where AI is changing jobs and what it means for real estate, released in July 2026, challenges the idea that AI is producing a single, uniform shift in demand for space. Instead, JLL’s global research team describes AI as a sorting mechanism, one that drives divergence across markets, industries and individual companies at the same time.

A more complicated picture than the headlines suggest

The report notes that public debate on AI and jobs tends to fall into one of two camps: warnings of mass disruption, or reassurance that little has changed. Both views, JLL argues, oversimplify a more complex reality.

Agentic AI, the report explains, is starting to separate the traditional link between growing output and growing headcount in knowledge-based work. This raises real questions for the office sector in particular, where long-term demand has historically tracked white-collar employment growth closely.

JLL’s analysis identifies three forces operating simultaneously in every market: role augmentation, where AI reshapes jobs without cutting headcount; selective displacement, where AI reduces headcount in specific roles; and job creation, where AI generates new roles and expands demand elsewhere. The balance between these three forces varies significantly by location and sector, producing four distinct outcomes ranging from high negative disruption through to what the report calls an AI boom upside.

Supply and building quality matter as much as jobs

Importantly, the research finds that a market’s job outlook does not translate directly into its property outlook. Supply conditions and building quality act as a filter in between.

The report points to life sciences as an example: a sector well placed to benefit from AI-driven research, yet one still working through elevated lab vacancy left over from a pandemic-era construction boom. United States technology employment, by contrast, fell over the past year even as office leasing demand from that sector kept rising, driven by AI-related company growth and a shortage of high-quality space.

Building quality and location, JLL says, remain the biggest differentiators of demand. Within cities, the report separates office stock into three tiers of AI exposure, from trophy, headquarters-grade buildings facing minimal risk, through prime engineering hubs, to standard and legacy-quality business park stock carrying higher exposure to automation-related job losses.

Adaptability, not exposure, is the key signal for investors

A research partnership between JLL, the MIT Sloan School of Management and the MIT Center for Real Estate, cited in the report, finds that in United States markets, the cities most exposed to AI-related job disruption are often the same cities generating the strongest AI-driven opportunity. San Francisco is highlighted as an example, with close to 30 per cent of its total leasing since 2025 coming from AI companies, despite the city also facing high displacement risk.

JLL suggests the more useful measure for investors is not raw exposure to AI, but a market’s adaptability: how quickly its workforce and economy can absorb disruption and redeploy into emerging roles. Less diversified markets with limited adaptive capacity, the report warns, carry a different and generally less favourable risk profile.

Industries are growing, but unevenly

The report also draws on JLL’s 2026 Future of Work survey, which finds that most industries still plan to grow their workforces over the next three to five years, with 60 per cent of companies expecting to expand headcount. The difference between sectors lies in the pace of that growth and whether AI is being used mainly to automate or to augment existing teams.

Logistics, healthcare and hospitality are identified as sectors combining strong workforce growth with an augmentation-led approach, reflecting their frontline, place-based nature. Professional services and data centre operators, by contrast, are undergoing more deliberate automation-led restructuring, allowing them to do more with leaner teams.

What it means for investors and occupiers

JLL concludes that outperformance in the current cycle will depend on identifying the specific overlap between AI-led growth, diversified and adaptable local economies, and constrained supply, rather than relying on broad market or sector assumptions. For occupiers, the report argues that static, headcount-based portfolio planning is no longer sufficient, and that adaptable space strategies will be needed as workforce planning continues to shift.