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Asia Pacific Law Firm Group Update | H1 2022

APAC law firm group update 2022_1536x1040

An overview and expert insights of the office market for key geographies in Asia Pacific and recent activity in the legal sector for the first half of 2022.


Markets to highlight:

TP_Icons_AU                 TP_Icons_SG

 

Australia

Law firms are sharply focused on recruitment and retention of top talent to keep up with exponential growth in client demand and strong deal flow in the M&A space.

Law firms adapted particularly well to the changing way of work heralded by COVID-19 with lawyers demonstrating an aptitude for performing their roles from home with productivity and continued billable output.

Throughout 2021 firms with practice groups in litigation, insolvency, M&A, and business disruption sectors performed well and propped up revenue for quieter parts of the firm. The beginning of 2022 has brought a sharp increase in recruitment activity to meet growing client demands and firms are using their office space as an important part of their staff attraction strategy.

The emphasis on encouraging a return to the office for at least 2 days per week has also informed the ‘flight to quality’ trend where firms are considering higher quality office space as compared to existing premises. Firms adopting this strategy are capitalising on strong market incentives and reducing their office footprint to offset the increase in occupancy cost.

All firms have been grappling with crystalising what the future of the office will look like, and some opted to renew and refit or negotiate an extension at existing premises while they work through their return-to-work policies.

Law firm activity in Melbourne:
  • Herbert Smith Freehills committed to 10,300sqm at Dexus’ new 80 Collins Street development, relocating from 101 Collins Street
  • Allens is currently in the market for approximately 10,000sqm – 12,000sqm of Premium/A grade office space in Melbourne central business district (CBD) and Colin Biggers Paisley is also looking for 2,000sqm – 2,600sqm in Melbourne CBD
  • Holding Redlich are currently in the market for approximately 5,000sqm of Premium/A grade office space in Melbourne CBD
  • Russell Kennedy lawyers are currently in the market for 4,500sqm – 7,000sqm of Premium/A grade office space in Melbourne CBD
 Law firm activity in Sydney:
  • Corrs Chambers Westgarth are relocating from 8 Chifley Square to Quay Quarter Tower in late 2022
  • Ashurst recently renewed at 5 Martin Place and have handed back a floor with rumours of bringing partners out of offices into open plan
  • Allen & Overy is relocating from 85 Castlereagh Street to levels 14 and 15 at 33 Alfred Street
  • Colin Biggers Paisley is in the market for approximately 4,500sqm of Premium/A grade office space
  • Clifford Chance is relocating from 1 O’Connell Street to Wynyard Place
  • Arnold Bloch Leibler recently refurbished their space and renewed at 2 Chifley Square
  • TressCox Lawyers have moved into HWL Ebsworth’s offices at Australia Square following the merger
  • Clayton Utz has handed back two floors at 1 Blight Street
  • Maurice Blackburn Lawyers are in the market and looking to relocate out of 201 Elizabeth Street


For more expert insights and recommendations for occupiers in the legal sector in Australia, contact Hannah Kimber.

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Greater China | Beijing

The Beijing real estate market is showing moderate recovery among the ongoing uncertainty from COVID-19.

Overall Grade A leasing activity, rentals and occupancy rates are approaching pre-pandemic levels driven primarily by large transactions of local financial sector occupiers. Medium-term uncertainty remains due to the ongoing resurgence of COVID-19 variants and the local government’s conservative approach to its pandemic management.

Owners of projects with high occupancy rates remain confident in the ability to retain existing tenants. China’s overall economic slowdown combined with COVID-19 related limitations on inspections and construction, especially in Chaoyang District, are putting pressure on new leasing pipeline, creating opportunities for high-quality occupiers.

Legal sector activity has been strong and driven primarily by consolidation and business scope expansion of emerging China-based firms.

Law firm activity:
  • Da Cheng 达成 Dentons has completed a relocation to Zhaotai International Center in Chaoyang District for approximately 15,000sqm gross
  • Hylands 浩天 Law firm is said to have expanded in Fortune Financial Center in Chaoyang District’s CBD by an additional 2,600sqm gross to a combined size of approximately 8,000sqm gross
  • Cooley LLP is said to have completed an expansion and upgrade to China World Tower A in Chaoyang District’s CBD to a combined size of approximately 3,100sqm gross


For more expert insights and recommendations for occupiers in the legal sector in Beijing, contact Yevgeny Bam.

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Greater China | Hong Kong SAR

An increasing number of international and regional law firms anticipate headcount expansion, particularly for middle to senior-level legal professionals and fee earners in 2022.

Despite political uncertainties and a global pandemic, both the public and private M&A markets remained incredibly active in 2021. Hong Kong serves as a tax-efficient hub for international firms active in the ‘Greater China’ market. The work is frequently led locally with support from Beijing and Shanghai offices, as well as alliances with PRC law firms.

Law firms that exhibited agility and were able to predict what was needed during the pandemic (i.e., generating more business by strengthening ties with current clients, looking at strategic hires and partnerships, prioritizing certain areas of practice and restructuring the firm and its resources) were well-positioned to gain market share. Those firms who were unable to ‘get out of the red’ either scaled down or exited (including Osborne Clark, Orrick, Vinson & Elkins, and Locke Lord to name a few). Having said this, several international law firms seemingly ramped up their Asia presence during this same period.

Although the headcount and demand for legal services is increasing, new letting activities will remain slow as most international firms have already renewed or restructured a long lease, and the closure of the mainland China border is preventing PRC firms from establishing a physical presence in the city. ‘Flight to quality’ has been the main factor in driving new letting activities.

Law firm activity:
  • White & Case have upgraded and relocated to York House
  • F Zimmern & Co have upgraded and relocated to The Hong Kong Club Building
  • Charles Russell Speechleys have upgraded and relocated to Two Pacific Place
  • Sullivan & Cromwell have upgraded and relocated to Alexandra House


For more expert insights and recommendations for occupiers in the legal sector in Hong Kong, contact Richie Lau.

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Greater China | Shanghai

While the long-term effects of the Shanghai April-May lockdown are still to be seen, areas of the market with the highest concentration of law firms exhibit particularly low vacancy rates and rising rents.

After a highly active Q1 in the core CBD, Shanghai entered Q2 under a city-wide lockdown which halted most, if not all leasing activity. Although the duration and severity of the current measures will determine the effect on the market’s leasing activity, at present buildings with a high concentration of law firms show unchanged rents and vacancy levels.

Strategic location considerations along with the lockdown’s impact on law firms’ revenues and potential relocation / changes in their upper management and key staff will be determinant in the industry’s short to long term real estate decisions.

Potential immediate cost-saving efforts such as rent reliefs will need to be assessed after both tenants and landlords can resume operations under somewhat normal conditions, with results varying according to tenants’ negotiation power, landlords’ policies and the after-lockdown health of their portfolios.

Law firm activity:
  • An Jie Law Firm expanded in K Wah building in Q1, for a total of 1,900sqm.
  • Qiaowen Law relocated to SK Tower, leasing a total of 900sqm.
  • JNT Law renewed and expanded in Jin Mao Tower, expansion area is 400sqm.


For more expert insights and recommendations for occupiers in the legal sector in Shanghai, contact Aliro Franco.

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Singapore

Legal firms are optimistic for the year ahead but face the issue of a tight labour market, and limited good-quality office space for expansion and relocation.

The legal sector in Singapore performed well in 2021, and firms are optimistic for the year ahead.

One of the biggest issues is executing expansion plans given the tight labour market, therefore limited office space expansion and relocations were carried out in 2021 and early 2022. 

Even more pronounced is the focus on the workplace as a key differentiator in the fight for talent. Numerous firms are implementing flexible working arrangements and looking to provide modern, inspirational work environments in their offices.

Leasing demand for CBD Grade A continued on its positive trend in Q4 2021, driven by the expansion of technology and selected professional services firms. CBD Grade A rents increased by 0.5% QOQ to SGD9.64 per sq ft in Q4 2021, supported by resilient net absorption. We expect CBD Grade A rents to grow about 4.4% in 2022, compared to the 0.8% growth in 2021. Vacancy rate is also expected to tighten to just under 4.0% by end 2022.

Colliers recommends occupiers proactively conclude final plans for their office footprints as the window of opportunity for rental negotiation starts to close.

Law firm activity:

For more expert insights and recommendations for occupiers in the legal sector in Singapore, contact Patrick Gidney and Jade Lim.

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Related Experts
Australia

Hannah Kimber

Associate Director, Tenant Advisory | Occupier Services

Occupier Services

Sydney

Hannah is an Associate Director in the Occupier Services Tenant Advisory team in Sydney. She is highly motivated and personable with an aptitude for building relationships, solving problems and creating client centric solutions.

Prior to joining Colliers, Hannah was a senior corporate lawyer at Clayton Utz and PwC where she spent almost 10 years advising listed and unlisted corporate clients on market leading mergers, acquisitions and capital raisings. Hannah’s extensive transactional experience uniquely positions her to be an engaged and trusted adviser who understands her client’s drivers and the broader commercial landscape.

She knows how to quarterback a deal from start to finish and reliably delivers outcomes for her clients. Hannah is genuinely committed to delivering quality results for the people she works with. She is recognized for her ability to connect with clients, communicate clearly and listen effectively. 

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China

Yevgeny Bam

Director

Office Services

Beijing

Bam advises Beijing corporate occupiers in managing their local property portfolios. He relocated to Beijing in 2006 and has been working in the local office market since 2010 with stints at some of the most recognized real estate firms. He also managed the international office portfolio of a leading Chinese cross-border accelerator, setting up new international branches and minimizing costs of existing outfits. He is fluent in Mandarin, Italian, Russian and English.

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Hong Kong SAR China

Richie Lau

Director

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Richie has over 9 years' experience in the real estate industry, providing office brokerage services to multi-national corporations and publicly listed companies.

Prior to joining Colliers, Richie was with Cushman & Wakefield (formely DTZ) and served clients in both Hong Kong and Kowloon for over 5 years. Richie also has sales experience in business events sponsorship, media & advertising and enterprise software across the Asia-Pacific region.

Richie was raised, educated and worked in Sydney before relocating back to Hong Kong in 2010.

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China

Aliro Franco

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Professional with +7 years  of experience in commercial real estate in Chile and Shanghai, with focus on  Tenant Representation and Transaction Management.

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Singapore

Patrick Gidney

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Patrick is a Senior Director in our Occupier Services Team in Singapore. Patrick's primary focus is building relationships with our occupier clients in Singapore and ensuring the delivery of memorable services to accelerate their success.  Patrick started joined Colliers' leadership team in 2021 to collaborate with the Occupier Services Team and drive exceptional results. 

Passionate about representing the interest of tenants, Patrick has been providing Tenant Representation services to clients for over 15 years. Patrick has been focusing on the Singapore market for over ten years and was previously based in Vietnam and London, where he trained as a Chartered Surveyor.  

Patrick most recently worked at a leading international flex space operator; this has given him unique insight into the co-working and serviced office industry. This will further strengthen our expertise and lead our clients into the future.  

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Singapore

Jade Lim

Associate Director

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Singapore

An experienced tenant representative with demonstrated track record in providing corporate occupiers a full range of real estate services in Singapore and across the Asia-Pacific region. A leader in Consulting-led approach to real estate strategy and negotiation. 

At Colliers International, clients benefit from our high-quality services, knowledge and dedication as part of Colliers DNA in #AcceleratingSuccess.

Well-rounded individual who is an active committee member at CoreNet with a Bachelor of Science (Real Estate) from the National University of Singapore and holds a Diploma in Information Technology.

Specialties: Workplace Consulting, Strategy, Tenant Representation, Negotiation, Flexible Workspace, Project Management and Facilities Management.

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