AMSTERDAM, 29 June 2026 – Artificial intelligence is expected to contribute to economic growth and, as a result, sustain demand for commercial real estate across Europe. This is one of the key findings of new research by Cushman & Wakefield examining AI's impact on the real estate market over the next decade.
The report AI Impact: Regional Insights – EMEAconcludes that AI is likely to be a net positive force for economic growth and real estate demand. However, its impact will vary significantly by sector, location and asset quality. According to the report, AI will not simply reduce the need for physical space. Instead, it will shift demand towards higher-quality assets and locations that meet increasingly stringent requirements around technology, energy infrastructure, accessibility, sustainability and user experience.
The anticipated increase in demand is not driven by a need for more space in general, but by higher levels of economic activity, the creation of new businesses and growing demand for modern, well-positioned real estate.
“There is a misconception that AI reduces the need for physical space," said Dr. Dominic Brown, Head of International Research, APAC & EMEA at Cushman & Wakefield. "Our analysis suggests the opposite: AI boosts economic activity, which ultimately translates into stronger demand for real estate across multiple sectors."
Four Scenarios, Different Outcomes
Cushman & Wakefield modelled four potential scenarios. In the baseline scenario, characterised by gradual AI adoption, productivity gains and economic expansion support real estate demand. In a more optimistic scenario, rapid AI adoption drives stronger economic growth, job creation and higher real estate values.
In two downside scenarios, AI either fails to meet expectations or technology leads to more significant labour displacement. In these cases, demand weakens, vacancies rise and pressure on rents and capital values increases.
“Our scenario analysis shows that AI will not affect real estate demand uniformly," said Frank van der Sluys, Head of Client Development and Strategic Consulting at Cushman & Wakefield Netherlands. "The question is not whether AI will influence real estate, but where and how that impact will materialise. In a market where high-quality space with sufficient power infrastructure is already scarce, quality, flexibility and energy availability become even more important. AI does not necessarily increase demand for every square metre, but it does widen the gap between locations and buildings."
Office Markets Will Evolve Rather Than Shrink
According to the research, office markets are more likely to evolve than contract. Efficiency gains resulting from AI may reduce the need for space associated with certain routine-based roles. However, this is expected to be partially offset by new business activity, changing job functions and broader economic growth.
As a result, demand is likely to shift towards high-quality, well-connected and flexible office buildings that support collaboration, innovation, decision-making and client engagement. Generic office space may come under pressure, while buildings better aligned with evolving workplace requirements are expected to become increasingly valuable.
Logistics and Data Centres: Modern Facilities and Power Availability Drive Growth
In the logistics and industrial sector, AI supports demand for modern and flexible facilities capable of accommodating automation, faster throughput and increasingly complex supply chains.
For data centres, the impact is more direct. AI accelerates demand for digital infrastructure, making power availability and grid capacity critical determinants of future growth and location selection.
Retail: Increasing Polarisation Between Prime Locations and Generic Space
In retail real estate, AI is not expected to generate broad-based growth in retail floorspace demand. Instead, it is likely to intensify the divide between strong and weaker locations.
Physical retail focused on experience, service, convenience and prime locations is expected to remain resilient, while more generic mid-market offerings may face greater pressure. Demand is therefore likely to concentrate on retail concepts and locations with a clearly differentiated proposition.
Overall, AI has the potential to support long-term growth in Europe by improving productivity and helping to offset demographic pressures in labour markets. However, Cushman & Wakefield emphasises that outcomes may vary considerably. In scenarios where AI adoption underperforms or results in greater labour market disruption, vacancy rates could rise and downward pressure on rents and asset values could increase.
For occupiers and investors, this highlights the importance of considering multiple scenarios rather than relying on a single forecast when making strategic decisions regarding occupancy, investment and portfolio quality.
The research uses econometric modelling and a scenario-based framework integrated into Cushman & Wakefield's global forecasting platform. It assesses the impact of AI through factors including regulation, energy infrastructure, data centre development, AI adoption, productivity, macroeconomic effects, occupier demand and real estate market responses.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm for property owners and occupiers, with approximately 53,000 employees across nearly 350 offices in 60 countries. In 2025, the firm generated revenue of $10.3 billion across core services including asset services, leasing, capital markets, valuations and other advisory services.
The firm's purpose, Better never settles, underpins a culture that continues to earn recognition across the real estate industry and wider business community.
For more information, visit Cushman & Wakefield Netherlands or follow the company on LinkedIn.
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