Grade A offices stay tight under all AI scenarios: Cushman & Wakefield

New modelling puts CBD vacancy between 1.5% and 4.9% by 2030 across four AI futures.

Demand for Singapore's Grade A office sector is unlikely to be reduced as artificial intelligence (AI) is seen to reshape how businesses use offices in Singapore.

In its new AI Impact: Office Insights Singapore study, Cushman & Wakefield studied four possible scenarios to look into how different paths of AI adoption could affect Singapore's economy, workforce and commercial real estate market through 2030.

The study found that the market remains resilient across different scenarios.

By 2030, vacancy is projected at 1.5% under Productivity-Led Expansion, 1.6% under the baseline, 2.4% following an AI Bust and 4.9% under Labour Displacement.

"One of the most striking findings is how resilient Singapore's prime office market remains even when we stress the assumptions around AI," said Dr Dominic Brown, head of international research at Cushman & Wakefield.

"Even in a scenario where AI materially displaces professional employment, our modelling has Grade A vacancy below 5% by 2030. It shows why the impact of AI on real estate cannot be understood through jobs alone - supply, productivity, business growth and the changing role of the workplace all matter," he added.

Cushman & Wakefield's baseline scenario points to steady office-using employment through 2030, underpinned by ongoing headcount growth in office-intensive sectors.

With automation taking over more routine tasks, offices are expected to shift toward serving collaboration, innovation, and client-facing work, a dynamic that could strengthen the case for premium space in accessible, well-serviced locations.

This trend could deepen an already visible divide in Singapore's office market. Grade A rents commanded a 48% premium over Grade B in 2026, up from 34% in 2019, a widening gap that points to tenants placing ever-greater value on prime locations.

With tenants prioritising collaboration, talent attraction, and workplace experience, the firm expects quality and adaptability to become key differentiators.

Well-appointed, flexible buildings are better placed to hold their ground, whilst more commoditised stock risks being left behind.

Singapore's constrained supply pipeline adds another layer of support to the market. A thin development pipeline through 2027 is set to push vacancy lower, with some relief expected when new stock arrives in 2028.

Under the baseline, CBD Grade A vacancy is forecast to tighten to 3.7% by end-2026, potentially dipping below 2% after 2029. On rents, Cushman & Wakefield projects a 4.8% increase in 2026, with average annual growth of 3.7% through to 2030.

"Singapore's position as a hub for technology, professional services and other knowledge-intensive businesses gives it an advantage as AI adoption accelerates. Combined with a constrained supply of high-quality office space, this should support the resilience of the Grade A market," said Natalie Craig, chief executive at Cushman & Wakefield Singapore.

"As businesses rethink how and where their people work, we expect demand to become more selective and thereby putting an even greater premium on quality, connectivity and adaptability," Craig added.

Rather than trying to call the timing of AI adoption, Cushman & Wakefield advises both occupiers and investors to build greater optionality into their real estate strategies.

Occupiers are encouraged to track space utilisation, map changing workflows to their space requirements, and use tools such as flexible workspace, lease breaks and expansion rights to stay agile.

For investors and landlords, the firm sees greater resilience in adaptable prime assets, whilst more commoditised stock may require targeted retrofits and repositioning to remain competitive.