Freshfields Bruckhaus Deringer is set to relocate its Hong Kong office out of Central district to Taikoo Place in Quarry Bay, The Lawyer has learned.
Freshfields is in the process of signing a lease with Swire Properties for 40,000 sq ft in Taikoo Place. It will be the first magic circle firm to move out of Hong Kong’s Central district and one of the latest law firms seeking to lower office rental costs amidst a challenging business environment and growing pressure on fees from clients.
It also comes as Freshfields looks at its real estate needs and efficiencies globally. Freshfields will significantly downsize in London in 2021 when it moves to a 300,000 sq ft premises at 100 Bishopsgate, almost half the size of its current Fleet Street offices. The move follows Freshfields leasing 80,000 sq ft of space for £2.6m in Manchester’s One New Bailey where it has relocated its entire business services function and a number of legal services jobs.
Taikoo Place is a newly developed commercial complex in Quarry Bay, on the east side of the Hong Kong Island. It consists of 10 office towers. It is understood that Freshfields has committed to take two floors in one of the towers.
The new office’s floor space is understood to be slightly smaller than the firm’s current premises in Two Exchange Square. The firm last renewed its lease of Two Exchange Square in 2012, when it took up an additional space of 6,250 sq ft to have a total area of 43,750 sq ft. The current lease will expire in March 2018.
The cost per sq ft in Taikoo Place is reportedly at HK$65 (£6.60), considerably lower than the average rent for highly sought-after office towers in Central such as at the Landmark building, which costs around HK$140 per sq ft ($14.3).
The move will save firm HK$3m (£307,000) in rent annually with the same amount of office space.
A Freshfields spokesperson declined to comment on specific details but said: “The firm is exploring a number of options regarding its future space requirements.”
It will be neighbouring UK firm Berwin Leighton Paisner (BLP), which was the first international law firm to move into the new complex. BLP has an office area of 15,000 sq ft in Dorset House since October 2016.
Other notable tenants include JP Morgan, BNP Paribas, DBS, Facebook, LVMH, Prudential and AXA.
Ince & Co is another UK firm to have moved out of Central Hong Kong, swapping an office in Citibank Plaza in Central for One Island East in Quarry Bay last year.
In 2013, Cleary Gottlieb Steen & Hamilton became the first major international firm to move out of Hong Kong’s main business district, when its took up a new office in Causeway Bay area.
Law firms reconsidering their property needs in Hong Kong comes amid a slowdown in capital markets and M&A transactions in the region. A number of other firms, such as Paul Hastings and Weil Gotshal & Manges, have responded by reducing or subletting office space, according to various property agencies.
Freshfields has worked with Taikoo Place’s owner and manager Swire Properties in several transactions. In 2012, the firm advised the joint sponsors on the spin-off and listing by way of introduction of Swire Properties on the Main Board of the Hong Kong Stock Exchange. Later that year, it was also involved in John Swire & Sons’ sale of its entire direct shareholding in Swire Properties, acting for the banks.
#1 Lawyers Search Engine