Job Loss Risks from AI Demand Caution in Office Market, Says Knight Frank Expert

Knight Frank India Predicts Shift in Office Leasing Market due to AI and Economic Uncertainties

India's office leasing market recorded a significant 20% year-on-year growth in 2025, reaching approximately 85 million square feet of transactions. However, Senior Executive Director at Knight Frank India, Gulam Zia, cautions that the potential impact of artificial intelligence (AI) on employment cannot be ignored, which may influence future demand for office real estate.

Zia notes that the immediate impact on office leasing may not be visible yet, as most transactions recorded in the first quarter of 2026 were initiated several quarters earlier. The real impact of current economic uncertainties and market disruptions is likely to be reflected later in the year, specifically in Q3 or Q4.

India's residential property market is expected to remain steady, with price growth averaging 7-8% annually. Zia suggests that investors consider buying raw land in areas likely to benefit from future infrastructure development, which could gain value as connectivity improves.

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Companies are taking longer than usual to finalize office real estate transactions, a sign of caution in the market. Amid ongoing geopolitical tensions, some real estate investors are discussing alternatives to investments in the Middle East.