Law to the fore in scramble for city office space
NEARLY a quarter of office take-up deals in Cardiff last year involved law firms, according to new research from Knight Frank.
Its report, Your Future Now, shows the legal services sector accounted for 19.2% of total Cardiff office take-up in 2016. This was the highest percentage of any city in the UK.
Some of the biggest letting deals involving legal firms during the year included Hugh James signing up to around 100,000 sq ft at the under-construction Two Central Square office scheme, in the centre of Cardiff, which it will take occupancy of next summer.
And also at Central Square, Morgan Cole moved into the now fully let One Central Square office scheme, taking just over 28,000 sq ft of space.
The report highlighted new technologies, disruptive market entrants and shifting client demands as powerful forces transforming what lawyers do and how they operate.
Matt Phillips, head of Knight Frank’s Cardiff office, said: “As a result, the law firm of the future will need to be more innovative, nimble, lean and tech-focused. This, in turn, will transform the property requirements of the legal services sector.”
The study highlighted five trends that would shape the future of the sector – rapid advances in technology; the competitive threat to midtier firms; the arrival of more new market entrants; a radical change to the organisational structure and talent requirements of law firms; and a need to demonstrate skill, productivity and ongoing innovation rather than simply scale.
And these trends would in turn dictate a different property requirement.
Knight Frank said the legal services landscape would become more crowded as alternative business structures gain traction by offering clients greater efficiency, quality and service.
The report said the impact of these changes on the property requirements of the legal services sector would be significant.
Mr Phillips said: “In Cardiff we are already clearly seeing the move to satisfy these new requirements by law firms.
“The flight to quality, with amenity-rich properties and locations that reflect brand and values, is evident in the demand by the legal services sector for the very highestquality office buildings in central Cardiff.”
The report also found that other changes in property requirements would include a holistic view of real estate costs, more efficient use of space and the incorporation of collaborative, client-centric and welfare space.
Mr Phillips said: “Although all this change is challenging to firms in the legal services sector, there is a real possibility that Cardiff as a whole could benefit.
“As the growth of legal process outsourcing companies seeking to operate from more cost-effective locations takes hold, regional markets such as Cardiff – where both a rental and operational cost discount to central London is clear – become extremely attractive.”