Law firms are expected to keep office leasing agents in central London busy this year, with yet more big names reviewing their requirements and some 2.5m sq ft of “stay or go” strategies now in play across the capital.
The slew of occupiers weighing their options includes US firm Kirkland & Ellis, which is eyeing a potential shift down the road from the Safra-owned Gherkin, EC3, to Brookfield’s redevelopment of 1 Leadenhall. The prelet would be for more than 110,000 sq ft at the 430,000 sq ft scheme, which has not yet started on site.
Meanwhile, Baker McKenzie, currently based at 100 New Bridge Street, EC4, near Blackfriars station, is shortlisting relocation options. Its list is understood to include CBRE Global Investors and Arax Properties’ planned refurbishment of the former Royal Bank of Scotland headquarters at 280 Bishopsgate, EC2, even though there is no date for when the revamp will start and complete.
“There are a significant number of lawyers looking for space now,” says John Mulqueen, CBRE GI’s head of offices in Europe, the Middle East and Africa. “280 Bishopsgate is a building which has appeal to a very broad range of occupiers including legal, technology and media.”
Covington & Burling has also been linked with a potential move to either LaSalle Investment Management’s 60 London Wall, EC2, or AXA Investment Management – Real Assets’ 22 Bishopsgate, EC2, development as it looks at leaving 265 Strand, WC2.
In total, JLL calculates that law firms have 2.5m sq ft of requirements both active and under consideration.
Get a move on
This prospective mass movement of London’s legal occupiers is being driven by a dearth of new high-quality office space coming into the market over the next few years, at a point when many law firms have lease renewals in buildings they have occupied for more than a decade.
For example, Linklaters’ lease at 1 Silk Street, EC2, ends in 2026 and the firm is in advanced discussions with Old Park Lane Management to take the majority of its redevelopment of 20 Ropemaker Street, EC2. Linklaters currently occupies more than 455,000 sq ft.
The Make-designed scheme, being developed by CO-RE on behalf of the owner, will create 450,000 sq ft of office space and 10,000 sq ft of retail space in a 27-storey tower. It is due to hit practical completion by the final quarter of 2022.
Fellow magic circle law firm Slaughter & May is also deciding on its occupational requirements ahead of a lease expiry in June 2026. It has let the entirety of the 260,000 sq ft 1 Bunhill Row, EC1, since 1998.
Most recently, US law firms White & Case and Skadden have joined their peers in considering moves.
White & Case has been in 5 Old Broad Street, EC2, since 2003 and is considering a move that would increase its office space from around 140,000 sq ft to almost 200,000 sq ft. Its lease break is in 2025. Skadden, meanwhile, has been based in Canary Wharf, E14, since the early 2000s.
Office supply in the city is currently at about 9.6m sq ft, 18% lower than the 10-year average of 11.6m sq ft, according to JLL. Vacancy rates are around 4.1%.
Brightest and best
There are other drivers of impending moves in addition to lease breaks and growing space requirements, according to Jeremy Attfield, lead director for central London offices at JLL. Not least of those is firms rethinking what message a modern office should send to existing and potential employees.
“Law firms in the capital are increasingly looking at their workspaces as a key strategic tool to enhance productivity, attract the best talent and drive better outcomes for their clients,” he says.
“Most law firms now approach their real estate projects with an ambition to create first-class environments that support new ways of working and provide high-quality wellness, amenities and client spaces.
“While cellular layouts remain the preferred route among the top US law firms in London and the magic circle, we continue to see experiments and implementations of more flexible and adaptable models of workplace design across the sector, supported by better uses of technology.”
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