ince March 2020 for many people the ‘office’ has been a desk, aka kitchen table, at home. That was when the first lockdown started, and staff were urged to start working remotely where possible.
Government guidance remains to work from home where you can, and the central London office leasing market suffered drastically last year. It was hit as bosses held off property move decisions, and many waited to see how staff coped away from HQs.
However, despite market concerns home working is here to stay, a number of firms have shown confidence in the London office post-pandemic, inking deals for new space. The way buildings are occupied in future may change, with many companies poised to embrace a mix of home and office work, but recent lettings show that for some chief executives, having a base in town remains vital.
This week law firm Latham & Watkins agreed a major pre-let. It expects to occupy a minimum of 200,000 square feet at 1 Leadenhall from early 2026.
Stephen Kensell, office managing partner of Latham & Watkins in London, said earlier this week: “The state-of-the-art building at 1 Leadenhall affords all the amenities, benefits, and flexibility of a modern building in the heart of the City, and will be designed with the firm’s signature values of collaboration and teamwork in mind.”
Latham & Watkins is not the only firm to sign a deal in the capital since the coronavirus outbreak, with gaming, tech and other legal businesses also lining up new offices.
The Evening Standard this week spoke to some of these tenants about why the office remains important to their businesses.
Amanda Illing is chief executive of Hardwicke Chambers, which in September agreed to take around 21000 square feet at One Gray’s Inn. It will move this Summer, subject to Covid rules.
Illing says the space will allow for growth, and adds: “Some people might think it unusual to be going for more space now, especially in central London. We did a second workplace survey during the lockdown and rather than people saying they would stay away, on the contrary, they were looking forward to when they could come back together.”
Post Covid some of the team might continue to work some days at home, but Illing says: “It is the nature of our organisation, who we are, and what we do to have a physical space that promotes collaboration with colleagues and with our clients, and that is what our people miss.”
She says the team are looking forward to enjoying areas in this new building that have been designed specifically with post-pandemic teamwork and being a modern barristers chambers in mind. That includes “a flexible ‘hub’ for everyone to enjoy, two roof terraces, and state of the art IT so people can ‘plug in and play’ in different parts of the building”.
Legal firm Baker McKenzie has agreed a pre-let for just over 150,000 square feet of office space at 280 Bishopsgate. It is set to move from its current location at 100 New Bridge Street in late 2023.
Alex Chadwick, managing partner of Baker McKenzie’s London office, says: “One of our strategic growth priorities is to expand our presence in London. This means taking a long-term view of Covid-19 and the vital role that the office will continue to play in face-to-face team and client working.”
Chadwick adds: “Inevitably, the future of work will look different as a result of the pandemic, and our future Bishopsgate office will be fully technology enabled so that our people can continue to work in a flexible and agile way. We know how vitally important this way of working is, and we will be developing policies in relation to this ahead of our move .”
At Arcadis, the design and engineering consultancy, plans are in place for the firm to move to a new London office on Fenchurch Street towards the end of the second quarter.
Mark Cowlard, chief executive of Arcadis UK and Ireland, says: “The way people work is evolving all the time, more so than ever over the last few months, and our aim is to give people choice about where and how they work in future. However, the office environment still plays a significant role, particularly when it comes to meetings, collaboration, building social connections, and engaging with our clients.”
According to property agent Knight Frank, there are 7.6 million square feet of active office requirements in London.
The professional services sector, which includes law firms, accounts for the bulk of active requirements (36%, or 2.7 million square feet), followed by the finance & banking sector at 24% (1.8 million square feet).
Some firms are looking to secure the most attractive sites in London amid concerns there could be a shortage of supply. In October Mike Prew and Andrew Gill, analysts at Jefferies, wrote in a report: “Of the 12m square feet London offices under construction, 60% is taken, so there is an emerging scarcity and the pre-letting market is expected to be brisk.”
Richard Proctor, head of London tenant representation at Knight Frank, says: “The flight to quality continues amongst law firms, as evidenced recently by Linklaters, Baker McKenzie and now Latham & Watkins. As the war for talent continues, so does the need to provide first class, client-centric office space in which lawyers can focus, collaborate and achieve the vital “subliminal learning” on which the continued success of their business depends.”