JLL’s latest report reveals how Artificial Intelligence (AI) is poised to significantly impact Australia’s commercial real estate (CRE) market. By 2030, AI’s economic influence is projected to soar to 13% globally, driving demand for an additional 483,000 square meters of office space across Australian CBDs.
Ronak Bhimjiani, JLL Real Estate Economist, explains that while AI may lead to job displacement in certain sectors, it will also create new roles, ultimately driving net job growth. This increased demand for skilled labor, particularly in AI-related fields, will reshape Australia’s office market landscape.
Sydney and Melbourne, already home to a large number of companies seeking rapid AI advancement and skilled talent, are poised to become key hubs for AI companies. The presence of leading global AI companies in these cities further solidifies their position as centers of innovation and growth.
Key findings from the report indicate that Australia is emerging as a significant player in the global AI landscape. The country is projected to experience a substantial 500% growth in AI jobs by 2030, leading to an additional demand for 483,000 square meters of office space. Sydney and Melbourne, with 76% of AI job postings, are at the forefront of this growth. Notably, 37% of the world’s top 52 AI companies have already established a presence in Australia, highlighting the country’s attractiveness as an AI investment destination.
The report compares Australia’s situation with established AI hubs, particularly in the United States. It points out that areas like San Francisco and Silicon Valley have driven significant office demand through a clustering effect.
Will Hamilton, JLL Head of Office Leasing – NSW, highlights the potential for Australia’s office market to emulate the success of US tech hubs like San Francisco and Silicon Valley. The rapid growth of AI companies in these regions has driven significant office demand, and Australia is well-positioned to capitalize on this trend.
Australia is gaining significant traction as a top-five global destination for US tech startups seeking expansion. With 37% of the world’s top 52 AI companies already having a presence in the country, Australia is proving to be an attractive hub for AI investment.
The global surge in AI investment is set to have a profound impact on Australia’s commercial real estate sector. As more international AI companies consider establishing or expanding their operations in Australia, the demand for office space, particularly in Sydney and Melbourne CBDs, is expected to increase. These two cities currently house a significant 76% of Australia’s AI companies, positioning them as prime locations for future growth.
Bianca Docker, JLL Head of Growth, Office Leasing – Australia, believes that landlords who embrace AI technology can gain a competitive edge. By strategically positioning their properties, these landlords can attract innovative, tech-focused tenants. This includes creating flexible workspaces tailored to the needs of startups and fostering AI-focused communities by locating properties near essential infrastructure like data centers and tech hubs.
The report emphasizes the obstacles and potential benefits for Australia in its quest to be a global leader in AI. Key areas of focus involve increasing data center capacity, enhancing network infrastructure to minimize latency problems, and cultivating a skilled IT workforce.
As AI continues its inexorable march, reshaping industries and fueling economic growth, its influence on Australia’s commercial real estate sector is poised to be profound. This presents a unique opportunity for visionary investors, developers, and occupiers to seize the initiative and capitalize on the transformative potential of this cutting-edge technology.
