Rising rents test Singapore's appetite for long-term real estate transformation

Over 40% of Singapore organisations say rents are a primary cost driver.

Singapore organisations are favouring long-term commercial real estate transformation over short-term cost cutting, but rising occupancy and technology costs are putting that ambition under pressure, according to JLL.

JLL's 2026 Future of Work Survey found that 67% of Singapore organisations lean towards long-term commercial real estate transformation rather than immediate cost minimisation.

Rising rents are a particularly significant issue. Some 42% of Singapore respondents identified rental cost increases as a primary cost driver, 14 percentage points above the Asia Pacific average of 28%. Energy and utility costs followed at 44%, while inflationary pressures affected 38%. Technology infrastructure investments and operating expenses were cited by 34% and 32%, respectively.

The cost pressures come as companies increasingly view technology as central to employee productivity. JLL found that reliable technology infrastructure was the leading strategy, cited by 44% of Singapore organisations, followed closely by advanced technology and AI support at 43%.

Physical workplace features remained relevant, although they ranked lower: 28% prioritised adaptable individual spaces and 27% wellbeing amenities.

Kamya Miglani, JLL's head of research for Real Estate Management Services, APAC, said the survey challenges the assumption that AI will simply reduce demand for physical workplaces.

"The organisations furthest along in their AI journey are doubling down on their physical environments," Miglani said, arguing that higher-value, cognitively demanding work requires workplaces that support focus, connection and collaboration.

The broader regional picture reinforces the importance of capability investment. JLL found that AI and technology skills gaps are the leading real estate transformation constraint globally, cited by 36% of organisations, and across Asia Pacific at 42%. Singapore's figure is lower, at 32%, suggesting its more immediate problem lies in coordinating existing capabilities across business units.

Talent availability nevertheless remains a concern: 56% of Singapore respondents expect talent scarcity rather than improving accessibility over the next three to five years, compared with 49% across Asia Pacific.

JLL said organisations are consequently taking different approaches to the affordability challenge. Some are concentrating on operational optimisation within existing portfolios; others are turning to strategic partnerships to manage execution complexity. Leading organisations are investing in upskilling, change management and cross-functional collaboration, treating near-term cost increases as an investment in future competitiveness.