Shares of commercial property services companies have tumbled in the latest selloff fueled by fears of disruption from artificial intelligence.
European shares across the region were hit on Thursday, following sharp losses on Wall Street.
Shares in estate agent Savills in London fell 7.5%, while serviced office provider International Workplace Group, which owns the Regus brand, fell 9%.
Assets at Britain’s two biggest property developers, British Land and Landsec, fell by 2.6% and 2.4% respectively.
On Wall Street, asset services firms declined for the second consecutive day. After even sharper declines on Wednesday, shares of CBRE fell 12.5%, shares of Jones Lang LaSalle fell nearly 11% and shares of Cushman & Wakefield fell 9.1%.
Commercial property stocks have become the latest sector to be hit by fears over the impact of rapid advances in AI, as selling last week spread from legal software, publishing, analytics and data companies to insurance companies, price comparison sites and wealth managers this week.
Shares fell as AI firms such as Anthropic, the company behind Chatbot Cloud, released new tools, although there was limited news Thursday, leading analysts to argue that the selloff was overblown.
AI has the potential to automate a wide range of office-based tasks and could lead to massive job losses. There are also concerns among investors that demand for offices could fall, which would hit property companies.
Jade Rahmani, commercial real estate analyst at New York-headquartered Keefe, Bruyette & Woods, said: “We believe investors are moving out of high-fee, labor-intensive business models that are considered potentially vulnerable to AI-driven disruption.”
However, he believes the selloff “could increase the immediate risk to complex trade-offs, even if the long-term AI impact remains ‘wait and see’”.
Dallas-based CBRE on Thursday reported fourth-quarter revenue of $11.6 billion (£8.5 billion), up 12%, and core earnings of $2.73 per share, beating analysts’ estimates. In 2025, revenues are projected to grow 13% to $40.6bn.
The real estate services firm is forecast to post 2026 profit above Wall Street estimates, driven by strong momentum in leasing and facilities management, as the number of datacenters grows rapidly and billions of dollars flow into AI infrastructure.
CBRE’s chief executive, Bob Sulentich, believes AI will benefit business in the long run, with its transactions and investment functions being “the most protected” from disruption.
“Clients hire CBRE to plan and execute complex transactions because of our creativity, strategic thinking, negotiation skills, deep base of market knowledge and extensive relationships.” He said. “None of these are likely to be replaced by AI in the near future.”
