AI to reshape, not reduce, demand for Singapore Grade A offices: C&W
In a September investigation report called AI Impact: Office Insights Singapore, the realty companies firm studied the potential impact of AI adoption on Singapore’s economic climate, workforce and business real estate through to 2030.
Amongst the 4 scenarios designed in its study, Cushman & Wakefield posits a baseline scenario that presumes moderate productivity gains from consistent AI fostering, in addition to steady employment degrees sustained by continued hiring in office-intensive markets.
Consequently, as more companies move to far better offices, the flight to quality can expand the existing gap in between prime and non-prime work spaces. According to Cushman & Wakefield, Grade An offices command a rental premium of 48% over Grade B offices since 2026, increasing from 34% in 2019.
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At the same time, new prime workplace supply remains minimal, which will even more sustain the Grade A market. Cushman & Wakefield projects openings for Grade A workplaces in the CBD to tighten up to 3.7% by the end of this year and fall listed below 2% beyond 2029. On the other hand, rents are anticipated to enhance 4.8% this year.
In opposition to this backdrop, the firm anticipates demand for higher-quality work spaces to be enhanced, even as some work gets changed by AI. “As routine activities become significantly automated, work environments are anticipated to play a better role in collaboration, innovation and client involvement,” Brown explained.
While the growing adoption of AI is set to improve just how businesses use the workplace, it is unlikely to significantly decrease demand for Grade A workplace in Singapore, according to Cushman & Wakefield.
The series of outcomes shows a “resilient” prime office market, with vacancy remaining below 5%, mentioned Dr Dominic Brown, head of international research study at Cushman & Wakefield. “It reveals why the effect 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.”
In any case, Singapore’s setting as a hub for technology, specialist solutions and other knowledge-intensive services provides it a benefit as AI adoption accelerates, said Natalie Craig, chief executive of Cushman & Wakefield Singapore.
“As companies reconsider just how and in which their individuals work, we anticipate demand to turn into much more selective, thus putting an even greater premium on quality, connection and adaptability,” she added.
Based on the scenarios, CBD Grade An office vacancy in Singapore is projected to range between 1.5% and 4.9% by 2030, contrasted to 4.4% as by the end of 2025. Meanwhile, rental movement for Grade A workplaces could vary from 6.5% growth to a decline of 2.3% in 2030. In contrast, leas grew by 2.2% in 2025.
The study looked at four scenarios with different presumptions connecting to the price of AI adoption, together with economic and labour market influence. The scenarios represent a spectrum of possible results– AI-led efficiency expansion driving raised interest for office space on one end, and AI-driven labour shift weakening leasing demand on the other.
