More layoffs, higher productivity or a bust? How Singapore’s prime office market could take to AI trends

Artificial intelligence could begin to impact Singapore's prime office market as early as 2027, according to a downsized scenario modelled by Cushman & Wakefield. This model suggests that net Grade A office space could decline to 3.6 million square feet between 2026 and 2030, representing a potential 5% decrease from the consultancy's baseline forecast.

However, even in this worst-case scenario, prime office demand remains positive. The model projects office-using employment will initially rise before shrinking through 2030, with job losses intensifying in subsequent years. Despite these potential job losses, prime office vacancy is expected to hover around 4-5% through 2030, with rents falling in the later years.

Industry experts believe that AI has not yet triggered widespread office downsizing, and leasing demand remains strong for quality space. Some occupiers may be relocating from older buildings to Grade A buildings, while AI companies set up operations in Singapore. The market is expected to experience a fresh wave of Grade A supply in 2028, potentially causing a sharper but shorter vacancy setback.