City law firms fight for the best London office space with ESG at the forefront
London’s legal sector has over 12m sq ft of lease expiring between now and the end of 2030, as law firms are set to compete for the best of the City offices.
According to data by Knight Frank annual take-up in the coming years is expected to exceed the high levels seen in 2023 (838,000 sq ft) and 2022 (1.6m sq ft) as a result.
It is noted that over two thirds (67 per cent) of current demand from the legal sector is focused on the City and South Bank sub-markets, suggesting that law firms will be competing for space in modern, sustainable office space in the City and neighbouring sub-markets over the coming years.
Several of the Big Law firms have obtained new office leases over the last couple of years, with a common theme appearing in the press releases.
Magic circle firm Clifford Chance is set to rent 321,000 sq ft of office space at the property developer’s 2 Aldermanbury Square project from 2028. US firm Reed Smith revealed last year that it was moving to Blossom Yard & Studios. While US firm McDermott has just moved into floor 46 of 22 Bishopsgate.
A common theme for the firms, other than for space in the growing firms, is to find an office building with an ‘excellent’ BREEAM rating, which will be aligned with the firm’s internal ESG strategy.
BREEAM sets the world standard for rating systems of building and works as an environmental assessment method.
Press releases over the years to announce office moves includes Dentons moving to One Liverpool Street in 2026 that has a “BREEAM ‘Outstanding’ rating”, Dechert’s move to 25 Cannon Street included a “BREEAM “Excellent” rating” and Hogan Lovells move in 2026 to 21 Holborn Viaduct came with a ‘Outstanding’ BREEAM ruling.
According to a separate request to Knights Frank by City A.M., at the end 2024 Q1, 49 per cent of London office lettings were for BREEAM certified buildings, a leap from 30 per cent in 2019 Q1.
Knight Frank’s analysis shows there is currently 5.8m sq ft of speculative Grade A office space under construction in the City and South Bank to be delivered by 2027.
Richard Proctor, head of London tenant representation at Knight Frank said: “We have seen strong demand for best-in-class offices from the legal sector in recent years”.
“The continued delivery of new and refurbished prime office space in the City is vital if London is to support the growth of the sector and cement its position as the leading global hub for the legal industry,” he added.