London law firm office take-up hits all-time yearly high
Office take-up by law firms in London has hit an all-time yearly high in 2022, as 95% of legal sector take-up this year has been for new or comprehensively refurbished offices, according to data from Knight Frank.
The property consultancy noted that 1.5m sq ft of space has already been acquired, a figure surpassing 2021, as workplace strategies prioritise the ESG credentials of buildings and enhanced workplace experience, as well as talent attraction and retention.
Last year, the sector committed to 1.2m sq ft of new London office space – then an all-time yearly high. This has largely resulted from the growing post-pandemic desire for higher-quality offices offering superior workplace experiences and environmental credentials.
Office take-up by law firms in London has hit an all-time yearly high in 2022, as 95% of legal sector take-up this year has been for new or comprehensively refurbished offices, according to data from Knight Frank.
The property consultancy noted that 1.5m sq ft of space has already been acquired, a figure surpassing 2021, as workplace strategies prioritise the ESG credentials of buildings and enhanced workplace experience, as well as talent attraction and retention.
Last year, the sector committed to 1.2m sq ft of new London office space – then an all-time yearly high. This has largely resulted from the growing post-pandemic desire for higher-quality offices offering superior workplace experiences and environmental credentials.
This desire has seen the sector dominate prelet activity in developments due for completion over the next five years. Since 2020, law firms have been responsible for 59.6% of all prelets and have agreed to take 2.18m sq ft of space in City of London office developments still under construction.
This quarter, “Magic Circle” firm Clifford Chance has agreed to prelet 321,100 sq ft at Great Portland Estates’ 2 Aldermanbury Square, EC2, development in the City. Also, Reed Smith has committed to 126,800 sq ft at Blossom Yard & Studios, E1 (pictured). The international law firm has committed to a new headquarters British Land’s Norton Folgate development next to Spitalfields.
Demand among London law firms is almost entirely concentrated on grade-A office developments. This year, 1.41m sq ft – or 95% of all office take-up by law firms – has been for new or comprehensively refurbished workspaces, according to the agency. In the previous quarter, take-up was 248,501 sq ft, equivalent to 9.6% of quarterly leasing volumes across London and 18.7% in the City.
Geographically, law firms have historically favoured the City core, with 94% of take-up in the third quarter attributed to this submarket, with the largest deals including Addleshaw Goddard’s 114,176 sq ft prelet of Pembroke’s 41 Lothbury, EC2, and US law firm Squire Patton Boggs’ 54,874 sq ft letting at 60 London Wall, EC2.
Richard Proctor, head of London tenant representation at Knight Frank, said: “Our research forecasts an approximate 10m sq ft shortfall in the delivery of new office space over the next four to five years, which is contributing to the current flurry of leasing activity by the legal sector.”
Jennifer Townsend, partner, occupier research at Knight Frank, added: “We have witnessed a surge in office transactions over the past two years among London law firms, which are pushing ahead with post-pandemic workplace strategies where they are seeking new headquarters that can attract and retain talent.
“Almost all the deals agreed have been for new, best-in-class City office buildings with strong sustainability credentials, transport connections and wellbeing features enhancing employee experience, to encourage staff to return to the office.”
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Photo © British Land
