ASIA PACIFIC LEGAL SECTOR TRENDS 2017 Asia Pacific Legal Sector Trends Demand from international firms remains subdued Challenge growing from domestic firms Strong focus on cost containment Relocation driven by right-sizing and cost saving Office design shifts to hybrid of open plan and enclosed spaces
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ASIA PACIFIC LEGAL SECTOR TRENDS
2017
Asia PacificLegal SectorTrends
Demand from international firms remains subdued
Challenge growing from domestic firms
Strong focus on cost containment
Relocation driven by right-sizing and cost saving
Office design shifts to hybrid of open plan and enclosed spaces
CBRE Research |
INTERNATIONAL LAW FIRMS
JUNE 2017ASIA PACIFIC LEGAL SECTOR TRENDS
Macro trends impacting international law firms
Aligning real estate strategy with market conditions
*Data related to the increase in the number of lawyers including partners is based on the top 50 international law firms and top 50 Asian law firms mentioned in Asia Legal Business, November 2016
Leasing demand will continue to be driven bydomestic law firms as they expand their officefootprint. International firms will remaincautious due to the economic slowdown andgeopolitical uncertainty.
Domestic law firms will drive demand whileforeign companies are set to remain subdued.New Grade A buildings providing efficientand flexible space will attract solid upgradingdemand. Vacancy and rents will remainunchanged in the short term.
Hong Kong remains the Asian headquartersfor most major U.S and UK law firms. Whileattitudes towards location and space arebeginning to change, the widespreadadoption of alternative workplace strategy bylegal firms in the city remains some way off.
A large volume of new Grade A supply will becompleted in Tokyo between 2018 and 2019.This is likely to encourage foreign law firms toseek opportunities for flight to quality/locationmoves, which will include a strong focus onimplementing workplace strategy.
Domestic law firms will continue to driveleasing demand, although increased activityfrom foreign law firms could be witnessed inthe medium term. The CBD will remain as thepreferred submarket. Rents are set to remainunchanged.
Cost containment is expected to remain a keytrend. The window for opportunistic deals isclosing as availability in new supply hasshrunk considerably. Renewals are likely todominate in the coming months. Demandfrom foreign law firms may pick up slightly asthe past few quarters have seen some firmsfrom U.S. and Europe form alliances withlocal entities.
The end of the mining investment boom, amature local market and an unfavourableexchange rate will continue to slow the rate ofnew legal sector entrants from abroad.
With plenty of high quality new supply andbackfill space entering the market, activity isset to pick up over the next couple of years.However, the adoption of new and moreflexible ways of working may result in adecrease in law firms’ overall office footprint.
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