Government’s AI push set to spur interest in one-north tech hub: analysts
CapitaLand, CapitaLand Ascendas Reit, Keppel DC Reit stand to benefit from drive to build artificial intelligence ecosystem
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[SINGAPORE] Singapore’s push into artificial intelligence (AI) is expected to boost interest for high-tech industrial space, particularly in business parks such as one-north, market watchers said.
In the Budget 2026 statement, Prime Minister and Finance Minister Lawrence Wong announced initiatives to accelerate AI adoption in Singapore – a “decisive factor for success” in a changed world. These include a National AI Council to drive the country’s agenda in the technology, and a larger AI park at one-north built by JTC.
The park will support the innovation, test-bedding and scaling of AI solutions. Located close to existing research clusters, it aims to facilitate collaboration among AI startups, researchers and businesses. It also builds on the Lorong AI pilot initiative, a co-working space for the AI community launched at Cross Street in January 2025.
The Ministry of Trade and Industry is expected to provide more information during its Committee of Supply debate.
Cushman & Wakefield research head Wong Xian Yang reckoned the AI push is likely to favour high-spec industrial developments with strong power capacity and sustainability credentials. Business parks such as one-north and Singapore Science Park are well-placed to attract greater interest, he said.
CapitaLand Ascendas Real Estate Investment Trust (Reit) and CapitaLand Investment, which have a strong presence in the area, stand to gain, OCBC researchers noted in a report published on Friday (Feb 13).
“Over time, newer business parks with modern specs are likely to capture AI-driven demand amid flight-to-quality trends,” Wong added. “Consequently, this could stimulate asset enhancement initiatives at older business parks.”
This could then drive rents in the area up, said Lee Sze Teck, Huttons Asia senior director of data analytics.
Analysts from OCBC highlighted that the faster adoption of AI could also drive incremental demand for data centre capacity.
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“Given the high barriers to entry, we expect incumbents with an existing strong presence in the Singapore market, such as Keppel DC Reit, to benefit from this secular trend,” they said.
Keppel DC Reit reported strong rental reversions of 45 per cent for its 2025 financial year, fuelled mostly by its Singapore data centre assets.
These developments build on an already resilient industrial market, noted Mohan Sandrasegeran, SRI head of research and content.
JTC’s fourth-quarter industrial market report indicated that overall industrial occupancy was 88.7 per cent. For multiple-user factories, occupancy stood at 89.9 per cent and for single-user ones, it was 88.8 per cent.
While occupancy eased slightly following strong completions in 2025, Sandrasegeran said this reflected supply expansion rather than weaker demand.
Overall industrial rents also rose 2.4 per cent for the year, with business park rents up 2.6 per cent. Industrial prices likewise grew 5 per cent year on year. This reflects continued demand from technology and research-intensive occupiers, and confidence in the sector’s medium-term outlook, he added.
Beyond industrial demand, Lee believes the new AI park could attract more AI talent, including from abroad, potentially boosting rental housing demand in one-north. The upcoming state land tender for a private housing site at Dover Drive may also see greater developer interest, he said.
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