Law firms have taken more than a quarter of all office space let in the City of London in the past year.
The 1m sq ft of space taken by the firms was the most the sector has leased since before the Brexit referendum of 2016, more than 50% higher than the amount taken in 2020 and 85% up on 2019’s total, according to Knight Frank.
“Some of it is expansion but a lot of what we are seeing is firms looking to trade up,” said Richard Proctor, head of tenant representation in London at Knight Frank.
According to Knight Frank, 94% of the offices taken by law firms across the UK last year were grade-A, compared with 73% five years ago.
Underscoring the appetite for the newest stock, three of the largest deals signed in London in 2021 were prelet agreements to take space in office towers that are being developed.
US firm Latham & Watkins agreed to take 250,000 sq ft and UK firms Allen & Overy and Travers Smith signed leases on 271,000 sq ft and 160,000 sq ft of City of London office space respectively.
Those firms are shuffling out of older stock for a number of reasons, said Proctor. “A big part of that is the talent and retention piece. Wellbeing is playing a part and we have got a lot of law firms which have committed to hit net zero carbon by certain dates. A lot of them are taking the opportunity to move to far more sustainable buildings,” he added.
