AI Giants Expand Singapore Footprints as CBD Office Rents Rise
Source: Singapore Business Review
Singapore's CBD office market is seeing a rare divide in tenant behaviour: established corporates are staying put to avoid relocation costs, while AI giants are actively expanding their footprints. OpenAI is establishing its first overseas Applied AI Lab here backed by over $300M in.
Singapore's CBD office market is seeing a rare divide in tenant behaviour: established corporates are staying put to avoid relocation costs, while AI giants are actively expanding their footprints. OpenAI is establishing its first overseas Applied AI Lab here backed by over $300M in investment and creating 200+ local roles, while Databricks is quadrupling its Singapore space with a new 32,000 sq ft premises at IOI Central Boulevard Towers. AI hardware firm Plaud is investing $10M to set up its APAC headquarters and first regional R&D hub, and Anthropic is reportedly planning a presence in the city-state.
The divergence is detailed in Knight Frank's Q2 2026 Singapore Office Update, which shows CBD Grade A rents rising 1.1% to $11.69 psf per month at Raffles Place and Marina Bay, while overall CBD occupancy hit 95.3% — a nine-quarter low in vacancy. Most tenants are renewing leases rather than relocating, with Knight Frank's Tridiana Ong noting that "the lack of justifiable relocation budgets has resulted in a corresponding lack of urgency amongst corporates to change premises." The only major office project added in 2026 is Shaw Tower, with no new CBD supply expected until 2027.
Beyond the core CBD, some occupiers are already looking outward. Active take-up is being seen in Alexandra and Paya Lebar from the public sector, consumer goods, professional services, and education sectors. CBRE's Head of Leasing David McKellar warns that "for occupiers with requirements in the next two to three years, the window to secure quality space on favourable terms is narrowing."
Why it matters for Singapore: This wave of AI company expansion is not just a real estate story — it signals Singapore's deepening role as the region's AI talent magnet and operational hub. OpenAI's first overseas lab, Anthropic's reported entry, and Plaud's investment all reinforce the city-state's position as Southeast Asia's premier destination for AI infrastructure and talent. However, the tight office supply and rising rents also present a challenge: without more Grade A space coming online, Singapore risks pricing out the very startups and scale-ups that fuel its AI ecosystem. The 3-5% rent growth forecast for 2026 will test whether the city can balance AI-driven demand with broader office market sustainability.