Law firms snap up London’s prime office space
Law firms continue to drive demand for prime office space in London to meet wide-ranging strategic agendas.
3 minutes to read
Law firm take-up in London continued its record-breaking streak with more than 350,000 sq ft of space acquired by law firms during Q1 2022. This equates to some 13% of total London take-up and a quarter of all take-up in the City of London.
The largest deal was Hogan Lovell’s 266,000 sq ft pre-let at Royal London Asset Management’s upcoming Holborn Viaduct scheme. The development, which is opposite the firms current HQ, has a particular focus on sustainability and wellbeing and is set to be accredited with both BREEAM “Outstanding” and WELL “Platinum” certifications.
Environmental considerations
The new office will support both changing workstyles and new ESG commitments set by the firm. Back in June 2021, Hogan Lovell’s launched a formal hybrid-working policy with the expectation that the majority of staff would spend at least 60% of the working week in the office.
Looking at ESG, the firm’s commitments include RE100, an initiative to commit to 100% renewable energy, Race to Zero, a strategy to reduce carbon emissions, and a pledge to be net zero by 2030.
This deal shows that law firms are increasingly prioritising ESG when making their real estate decisions. Indeed, our law firm (Y)OUR SPACE survey found that 86% of all respondents believe that ESG will either be somewhat influential or the key influence in determining their real estate strategies over the next three years.
The pressure to take action for London-based law firm offices will be further exacerbated by the fact that currently only 38% of the London offices of the UK’s top 200 law firm’s are BREEAM rated.
Amenity-rich office space
Elsewhere in the City, 22 Bishopsgate, EC2 continued to attract law firms with McDermott Will & Emery signing up for 27,296 sq ft. They join Cooley, Skadden, Arps, Slate, Meagher & Flom and Covington & Burling.
Hamid Yunis, London managing partner at McDermott Will & Emery was quoted as saying: “This move will allow us to get all of our people into the new building and continue to grow. Our priority was to secure premises that would provide an appealing environment for both clients and our people and we couldn’t be happier with the outcome and the benefits 22 Bishopsgate will bring.”
Again the building has a number of certifications including: WiredScore “Platinum”, WELL and BREEAM “Excellent” rating. It incorporates state-of-the-art technology and has an extensive range of amenities and shared facilities. The appeal of such an amenity-rich, highly serviced building corroborates the findings of our law firm (Y)OUR SPACE survey, where 71% of law firms stated that they expect employees to demand a broader range of amenities in the office over the next three years.
US office space investment
US law firms continued to account for a significant proportion of London law firm take-up, often as a direct consequence of further expansion. In Q1 2022, for example, Jenner & Block increased their London footprint by 45%, when taking 13,483 sq ft at 10 Exchange Square, EC2.
Co-managing partners Katya Jestin and Randy Mehrberg noted that “Expanding our presence in London is one of the firm’s long-term strategic growth priorities.” Ten Exchange Square features a brand new café reception, cycle and changing facilities. It benefits from BREEAM “Very Good” and WiredScore Gold certifications.
Changing office strategies
Analysis of Q1 2022 London law firm leasing activity provides further evidence of how the trends articulated in our latest law firm research are playing out. ESG, health and wellbeing, and connectivity are all to the fore along with a preference for best-in-class space in amenity-rich locations that can flex to changing working practices and client needs.
It also demonstrates that when it comes to the London law firm market one-size does not fit all in terms of space requirements. There are those that are expanding as well as those that are downsizing. With over 1.4 million sq ft of active law firm requirements as of the end of Q1, watch out for more activity from law firms seeking buildings that support their future needs.
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