AI to reshape, not reduce, demand for Singapore Grade A offices: C&W
Among the 4 scenarios designed in its study, Cushman & Wakefield assumes a baseline situation that assumes moderate productivity gains from consistent AI fostering, together with steady work degrees supported by ongoing hiring in office-intensive sectors.
The variety of outcomes suggests a “resilient” prime office market, with vacancy remaining listed below 5%, mentioned Dr Dominic Brown, head of international study at Cushman & Wakefield. “It shows why the effect of AI on property can not be comprehended through jobs alone– supply, productivity, business growth and the modifying role of the work environment all issue.”
In opposition to this background, the firm anticipates need for higher-quality work spaces to be enhanced, even as some work gets changed by AI. “As routine tasks end up being progressively automated, work environments are anticipated to play a better function in partnership, innovation and client involvement,” Brown discussed.
“As businesses rethink exactly how and where their individuals work, we expect demand to turn into a lot more selective, thereby putting an even higher costs on quality, connectivity and adaptability,” she included.
At the same time, brand-new prime office supply remains restricted, which will further sustain the Grade A market. Cushman & Wakefield projects openings for Grade A workplaces in the CBD to tighten to 3.7% by the end of this year and fall below 2% past 2029. On the other hand, rents are anticipated to enhance 4.8% this year.
In any case, Singapore’s placement as a center for innovation, professional services and other knowledge-intensive companies gives it a benefit as AI adoption increases, claimed Natalie Craig, chief executive of Cushman & Wakefield Singapore.
While the growing adoption of AI is set to reshape just how services make use of the office, it is unlikely to substantially minimize demand for Grade An office in Singapore, according to Cushman & Wakefield.
Based on the scenarios, CBD Grade A workplace vacancy in Singapore is projected to range in between 1.5% and 4.9% by 2030, compared to 4.4% as by the end of 2025. Meanwhile, rental movement for Grade An offices could vary from 6.5% growth to a decrease of 2.3% in 2030. In comparison, rents grew by 2.2% in 2025.
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The study evaluated four situations with various assumptions associating with the rate of AI adoption, together with economic and labour market impact. The circumstances stand for a range of potential outcomes– AI-led efficiency growth driving increased need for office space on one end, and AI-driven labour displacement weakening leasing need on the other.
In a September investigation report called AI Impact: Office Insights Singapore, the real estate services firm studied the possible effect of AI fostering on Singapore’s economic situation, workforce and commercial realty through to 2030.
Consequently, as more companies gravitate to much better work areas, the flight to top quality might widen the existing gap in between prime and non-prime offices. According to Cushman & Wakefield, Grade An offices command a rental costs of 48% over Grade B workplaces as of 2026, increasing from 34% in 2019.
