Overview
Singapore’s job market is changing unevenly under AI. Some workers and firms are more exposed than others, and the government has acknowledged that not every job can be protected. At the same time, a similar divide is appearing in the office market: the best buildings are pulling further ahead, even as the average building stays soft.
AI is reshaping who has a job
A recent CNA headline captured where Singapore’s AI conversation now stands: as AI reshapes jobs, workers and firms face uneven change. The Association of Small and Medium Enterprises’ president raised a pointed warning — workers entering the job market now could lose their competitive edge if they lean on AI instead of building their own skills.
The unevenness shows up in three places. SMEs are exposed but under-resourced: they make up roughly 94% of Singapore’s companies and employ close to half the workforce, and many lack the in-house expertise to adopt AI safely, with PwC flagging that gains at SMEs risk disappearing if the one person who championed the technology leaves. Early-career workers carry more of the risk, with officials acknowledging Singapore’s workforce is more exposed than most economies, given how knowledge-based and office-using the economy is. Roles differ sharply too: repetitive, rules-based tasks are most exposed to automation, while roles built on relationships and judgment calls are more likely to be assisted than replaced.
Deputy PM Gan Kim Yong, on the 2026 Economic Strategy Review: “We will not be able to protect every job, but we aim to protect every worker.” The review’s centrepiece is “career bridges” — training, coaching and job-matching that moves at-risk workers into steadier roles before disruption forces the issue.
Why prime office space is moving differently
Globally, basic desk space is losing ground. Newmark’s base case has US office-using employment barely growing, +0.3%, through 2030, with risk concentrated in entry-level, repetitive back-office roles. But premium space is gaining, not losing: top-tier office rents are rising even as average office rents fall. A “flight to quality” is taking hold, with good buildings in good locations pulling further ahead of the pack.
AI companies are themselves large tenants, making up almost a quarter of all new office leases in major US tech cities in early 2026. Offices are also becoming more valuable for teamwork specifically — employees who use AI most heavily are also the most social and the most likely to come in.
What Singapore's numbers show
Singapore’s office market is telling the same story in bricks and mortar. Core CBD Grade A rent has now risen for a fifth straight quarter, reaching $12.40 psf per month (+0.8% QoQ). Grade A vacancy fell to a razor-thin 3.3%, while islandwide vacancy is a much softer 10.8%, though it too improved, down from 11.7% a year earlier.
Tenants are taking up space, but they are choosier about where. The Business Times reported that Allianz leased about 78,000 sq ft at the newly-completed Shaw Tower, relocating from CapitaSky; the space it vacated is already seeing strong demand amid tight supply.
CBRE expects Core CBD Grade A rents to grow roughly another 5% in 2026, helped by a thin completion pipeline — Shaw Tower is the only major office completion expected this year. Knight Frank notes that Anthropic is planning to expand its Singapore office footprint, followed by OpenAI, with AI firms adding to demand for prime office space.
What this means for investors
Rent rising does not automatically mean it is a good time to buy. A fifth straight quarter of Grade A rental growth is a real demand signal, but rents, prices and cap rates do not always move together — a building, or a condo, that is already fully priced can still offer a mediocre yield even while its rent keeps climbing. Check the entry price and the income return together, not the rent trend alone.
Office rental growth signals real, durable demand near CBD and tech hubs, but one AI tenant’s lease does not make an entire corridor a sure thing. Cross-check against the URA Master Plan growth corridors before paying a premium for a “growth area” condo.
For residential investors, the broader takeaway is that district-level growth does not guarantee equal performance across every project. Genuinely top-tier buildings in good locations keep pulling away from the average, and a rising district median does not mean every project in it is getting more valuable. One-north and Mediapolis, and the CBD/Tanjong Pagar corridor, are exactly the areas seeing this office demand play out — worth watching where AI firms and career bridges land next.
