When work changes, what happens to property?

Artificial intelligence is entering administrative, financial, legal and technical activities. Some tasks can be completed faster, but that does not automatically mean fewer employees. The relationship between productivity, headcount and occupied floor area may change. Will businesses still need the same amount of office space?

Transformation rather than the end of offices

The impact will differ across industries. Some firms may reduce traditional desks; others may expand through new activities. Workplaces may place greater emphasis on meetings, collaboration, privacy and flexibility. The key question is not whether demand will fall everywhere, but which spaces will remain competitive.

Swiss market signals need careful interpretation

Hybrid work, location quality and construction cycles already affect the office market. These trends should not automatically be attributed to AI. UBS and JLL research provides useful context, but does not yet establish a measurable standalone effect of AI on office property values.

Adaptability may support value

Two buildings generating similar income today may have very different prospects. A well-connected, efficient building with divisible floorplates can accommodate different tenants. An inflexible property with outdated systems may require significant capital expenditure. Sustainable rents, vacancy risk, refurbishment costs and required returns remain central to valuation.

Lugano: a market worth watching

Lugano’s financial, fiduciary, legal and consulting sectors make this topic particularly relevant. Yet there is no reliable basis today to estimate how much office space the city will require in 2035. Local analysis should track achieved rents, available space, take-up, building quality and tenant sectors, distinguishing central from peripheral locations.

The question for investors

Will a property generating solid income today remain competitive in ten or fifteen years? Answering that requires technical and economic analysis rather than sensational predictions about AI. Long-term value will also depend on how useful a building remains.

Sources and further reading

UBS Real Estate · JLL Research · Ufficio federale di statistica ·