A&O Shearman has taken a further 100,000 square feet of offices at British Land and Singapore sovereign wealth fund GIC's 1 Broadgate in the City of London in the latest sign of international law firms taking up pre-agreed options for expansion in capital.
The agreement means the law firm will occupy 354,000 square feet in total at the development by Liverpool Street Station. The development is also set to be JLL's flagship location in the UK.
British Land and Singapore's GIC first announced they had secured Allen & Overy for 254,000 square feet of offices at the development in 2021, as reported. JLL had previously prelet 129,000 square feet.
A&O Shearman was formed as a result of a merger between Allen & Overy and Shearman & Sterling that was formalised last year. The building will practically complete in June to July next year with A&O Shearman beginning fit out and then beginning to move in in 2026. It has taken floors 2 through to 7, with JLL taking 8 through to 11. The 12th floor remains available.
The law firm has previously said the move to a more sustainable modern office will play a significant part in helping it meet its commitment to a 50% reduction in absolute carbon emissions by 2030 as approved by the Science Based Targets initiative.
A&O managing partner Gareth Price said it would contribute to an estimated 80% reduction in its annual London office carbon emissions as well as having market-leading certifications for its environmental impact and wellbeing. A&O will be leaving JPMorgan's One Bishops Square, its London home since 2006 and will now occupy roughly the same amount of space.
The building is part of the Broadgate campus, home to leading legal, financial, technology and media companies as well as some of London’s best restaurants, bars and retail. Broadgate is adjacent to Liverpool Street station, as well as the Elizabeth Line.
British Land has continued a strong run of lettings at its new London office developments this year. CoStar News revealed that it has secured the largest UK office letting of 2024, a prelet at 2 Finsbury Avenue with hedge fund Citadel to lease a minimum of 258,000 square feet of workspace. The deal includes options to lease up to another 122,000 square feet.
Details of A&O's extra commitment emerged in British Land's trading update yesterday (2 October), which also revealed the REIT was paying Brookfield £441 million for a portfolio of seven retail parks, as reported.
This morning (3 October) British Land announced the successful pricing of a placing of new ordinary shares of 25 pence each to raise £301 million to back the acquisition.
Simon Carter, Chief Executive, said: "We are delighted with the outcome of this important equity placing for British Land, which we are using to acquire this attractive portfolio of retail parks with strong rental growth prospects. We would like to thank all existing and new shareholders for their support as we continue to execute on our strategy."
There has been a trend for law firms to agree options on further space when signing major London office moves in recent times. Those options are increasingly being taken up.
In September of last year, CoStar News revealed that US law firm Kirkland & Ellis had taken up its option on another 170,000 square feet at M&G's 40 Leadenhall Street office tower in the City of London to complete one of the largest legal prelets in the capital.
The letting means the firm will occupy a total of 385,000 square feet stretching from the top 34th floor to the 15th floor at the Gotham City complex that M&G is developing.
Last year law firm Linklaters exercised its option to acquire a further 50,000 square feet at 20 Ropemaker, EC2. It had signed a prelet in 2020 for 328,192 square feet, with plans to relocate from 1 Silk Street.
Latham & Watkins took on an additional 70,000 square feet at One Leadenhall last year after agreeing a lease for a minimum 200,000 square feet in 2020.
Speaking to CoStar News, Mike Wiseman, head of office leasing at British Land, said there was a clear trend, particularly among international law firms, to take up agreed option space.
"Occupiers in the past generally went long on space with a view that they would maybe fill it or maybe let it later. People have moved on from that though. We embrace the change. We recognise tenants need flexibility but we price it and we do see most occupiers taking up that space eventually. There is an extraordinary growth story with the lawyers."
JLL and CBRE advise at 1 Broadgate. Capital Real Estate advised A&O Shearman.