AI to reshape, not reduce, demand for Singapore Grade A offices: C&W
Consequently, as even more businesses gravitate to far better work areas, the flight to high quality could widen the existing space in between prime and non-prime work spaces. According to Cushman & Wakefield, Grade An offices regulate a rental costs of 48% over Grade B offices since 2026, boosting from 34% in 2019.
The variety of outcomes shows a “resilient” prime office market, with vacancy continuing to be below 5%, mentioned Dr Dominic Brown, head of international research study at Cushman & Wakefield. “It reveals why the influence of AI on real estate can not be recognized via jobs alone– supply, productivity, business growth and the modifying role of the work environment all issue.”
The study looked at 4 scenarios with various assumptions relating to the rate of AI adoption, together with economic and labour market effect. The scenarios represent a spectrum of possible outcomes– AI-led productivity expansion driving increased need for office space on one end, and AI-driven labour shift weakening renting need on the other.
In any case, Singapore’s placement as a center for technology, expert services and various other knowledge-intensive organizations offers it an advantage as AI adoption accelerates, stated Natalie Craig, chief executive of Cushman & Wakefield Singapore.
At the same time, new prime workplace supply remains minimal, which will additionally sustain the Grade A market. Cushman & Wakefield jobs vacancy for Grade An offices in the CBD to tighten to 3.7% by the end of this year and fall listed below 2% past 2029. On the other hand, rental fees are anticipated to raise 4.8% this year.
While the expanding adoption of AI is set to reshape just how services make use of the workplace, it is unlikely to substantially minimize need for Grade An office space in Singapore, according to Cushman & Wakefield.
In a September investigation report labelled AI Impact: Office Insights Singapore, the property companies firm researched the possible influence of AI fostering on Singapore’s economic climate, workforce and industrial property via to 2030.
Among the four scenarios modelled in its study, Cushman & Wakefield assumes a baseline circumstance that assumes moderate efficiency gains from constant AI fostering, in addition to stable work levels sustained by continued hiring in office-intensive sectors.
In opposition to this backdrop, the firm expects need for higher-quality workspaces to be reinforced, even as some work gets changed by AI. “As routine activities end up being significantly automated, work environments are expected to play a higher function in collaboration, innovation and client engagement,” Brown discussed.
Based upon the scenarios, CBD Grade A workplace vacancy in Singapore is projected to range between 1.5% and 4.9% by 2030, compared to 4.4% as at the end of 2025. Meanwhile, rental activity for Grade A workplaces could vary from 6.5% growth to a decline of 2.3% in 2030. In comparison, leas grew by 2.2% in 2025.
“As businesses rethink just how and where their people work, we expect demand to turn into a lot more discerning, thus placing an also greater premium on quality, connectivity and adaptability,” she added.
