Law firms help drive record demand for London office space
Law firms, accounting firms and consultancies acquired a record 2.5m sq ft of central London office space in 2022, following a boom in the professional services sector’s revenues.
London’s top services firms took up 50 per cent more office space last year than in 2021, as the sector capitalised on an “unprecedented” surge in demand, new data shared exclusively with City PM shows.
The data appears to buck forecasts of the post-pandemic death of the office, with professional services firms’ workspace uptake surpassing previous 2010 highs by 35 per cent, according to data from real estate services firm Avison Young.
A series of high-profile office moves helped the sector smash previous records as top London law firms including Clifford Chance, Addleshaw Goddard and Hogan Lovells all announced plans to move offices in 2022.
The moves followed a surge in UK legal sector revenues during Covid-19, as the pandemic sparked a boom in M&A activity.
Net zero targets have also driven the UK’s top firms towards moving into more environmentally friendly workspaces as a means of achieving their climate goals.
Surging demand for advice on digital transformations and ESG during the pandemic also saw accounting and consulting sector profits boom.
London’s financial sector took up 2.2m sq ft of office space in 2022 in its biggest uptake of office space since before the pandemic.
The capital’s tech, media and telecommunications firms, however, saw their office take-up levels drop 45 per cent below 10-year averages, as the sector faced a downturn in 2022.
Higher demand for office space in turn drove up rents in London’s West End to their highest levels on record of £127.50 per sq ft. City rents remained stable at rates of £77.50 per sq ft.