The results speak for themselves. Research for this year's real estate section of The Lawyer UK 100 Annual Report confirms once and for all that, far from being the poor cousins to their corporate and finance brethren, the UK's property practices are an essential and highly profitable element in any successful full-service firm. In the profitability stakes, real estate practices are now benchmarking themselves against their corporate counterparts, and indeed in many cases they are outperforming them.

The growing complexity of even the smallest real estate transaction has ensured that firms are advising on structures many never thought possible just five years ago. Tax structures such as Jersey property unit trusts and the importance of real estate funds have demanded that real estate groups draw on the expertise of their partners in corporate, tax and finance. Poor returns in the equities market have also seen investors with cash to spend circling real estate in search of a safer product. At the same time, regeneration is booming.

Consequently, the revenue per partner (RPP) figures may be deceptive. Firms such as Allen & Overy (A&O), Ashurst, DLA Piper Rudnick Gray Cary and Freshfields Bruckhaus Deringer have large European practices, with many real estate deals being accounted for in the corporate department, detracting from otherwise strong RPP results.

It is no coincidence that firms for which real estate comprises a large proportion of turnover also posted some of the strongest performances in the UK 100. The mid-market elite, including Addleshaw Goddard, Berwin Leighton Paisner (BLP) and SJ Berwin, all have significant real estate practices, contributing 25.4, 35 and 23 per cent to their total turnovers respectively. The mid-market UK firms are also speculating that, in their move towards complex global real estate transactions, the magic circle is taking its eyes off the domestic real estate market, creating opportunities for savvy mid-market players. Clifford Chance's department head Cliff McAuley, however, insists that his firm will continue to carry out lower-margin real estate work, such as portfolio management, for key clients.

Even among those firms that posted drops in turnover, real estate outperformed many other practices. Clifford Chance, which boasts the largest real estate practice in the UK 100, posted a decrease in real estate turnover of 2.9 per cent. McAuley attributed the dip to the closure of the firm's Berlin office in November, the offloading of the San Francisco practice and the loss of key partners in London. However, despite the drop-off, RPP in real estate rose 13 per cent and real estate average profit per equity partner (PEP) increased by 19 per cent. The firm managed to haul its RPP from just over £1m in 2003-04 to £1.5m last year.

Eversheds' real estate team continued to make ground on Clifford Chance, posting a 4 per cent turnover rise on the previous year. Among the firm's key instructions, it advised the London Development Agency on the planning and procurement for the Olympic City at Stratford in East London. The firm has sought to expand its capability in real estate investment funds, culminating in its lucrative appointment to Legal & General's panel. According to Cornelius Medvei, Eversheds' head of property, the firm is on track to achieve its ambition, which was unveiled in 2001, to double in size by the end of 2006.

DLA made a major investment in its real estate practice this year when it added 10 new partners across its European offices, including five lateral hires. Global turnover for the group is up more than 12 per cent to £52.7m. The firm has benefited from its Scotland offices, with a range of deals, including the acquisition of the St Enoch Centre in Glasgow and advising Paramount Hotels on the £210m sale of its entire portfolio.

Linklaters' real estate practice failed to translate a string of new client wins, including British Land and Great Portland Estates, into a corresponding increase in turnover during 2004-05, instead only maintaining its 6 per cent contribution to the firm's overall turnover. This was despite the group advising on such high-profile deals as British Land's plan to build its 48-storey building, the tallest in the UK, and InterContinental Hotels Group's £1bn sale of 73 UK hotels to Lehman Brothers. The firm also managed to maintain a steady property partnership of 37, despite a handful of partner losses, including that of former head of construction and engineering (before the group was rolled into the real estate department in January 2003) Marshall Levine, who left for Field Fisher Waterhouse.

The big news in the mid-market was, of course, the defection of Clifford Chance's charismatic real estate rainmaker Robert MacGregor to BLP. Clifford Chance's loss was very much BLP's gain, as just months after joining the firm MacGregor had already secured two key instructions from trophy client Canary Wharf. BLP's real estate group had one of the strongest years of any in the table, posting a 17 per cent turnover increase to £42.5m and, MacGregor aside, recruiting four lateral partners into the group.

A slow year for Freshfields' corporate group meant that the real estate group had to rely more on its own contacts than in other years. Hence, revenue for the department remained flat at £39m. Clients such as Scottish Widows, Debenhams and Goldman Sachs came to the fore. However, the group was encouraged by an increased workload from clients such as Land Securities, for which Freshfields closed its first large development transaction, Bankside. It followed the Bankside deal with an outsourcing to the Metropolitan Police Authority. The real estate group moved into the new financial year hoping that its role on British Land's £811m acquisition of Pillar Property was a sign of an increased workload in 2005-06.

At Lovells, which confirmed a 3 per cent turnover drop, real estate celebrated a respectable year, with turnover increasing marginally. The firm has developed a fine reputation in outsourcing deals, last year advising Aviva on the Norwich Union property outsourcing. It also acted on one of the most complex deals of the year, the Slough Estates property swap.

A&O had something of a watershed year in 2004-05. Buoyed by the arrival of former Clifford Chance real estate partner Robert Porter, the global team posted a revenue of £46.8m. As with the other magic circle firms and larger international outfits, a significant portion of A&O's real estate revenue comes from both overseas instructions and non-core real estate work such as finance, corporate and litigation. That notwithstanding, the team had a stunning year. It won new clients such as Brixton, Tishman Speyer, Quinlan and JPMorgan Fleming Asset Management, the latter having travelled from Canary Wharf with Porter. The team has also broken new ground in the level of pan-European real estate funds and is also looking to ramp up its pure property offering.

While Addleshaws' real estate practice failed to outperform the projects and finance groups, it still managed a very respectable 13 per cent turnover increase on 2003-04. London real estate posted the strongest performance, registering a turnover increase of 19 per cent. The year also saw the firm promote two partners to its real estate group. Real estate head Michael Reevey attributed the results to the success of the firm's strategy of leveraging off its Leeds and Manchester offices to conduct highend real estate work at a competitive price. Last year's biggest biller by revenue was Travelodge, which the firm advised on its major sale-and-leaseback. Standard Life, Threadneedle, Anglo Irish, Scottish Widows, Highbridge, Sainsbury's and Admiral Tavern are among the other big-billers.

For Nabarro Nathanson, 2004- 05 was a year of defending its position as a key adviser to a number of the group's biggest real estate clients, but with mixed results. The firm reasserted itself aggressively as a key adviser to Land Securities after advising on the group's negotiations with Slough Estates for a swap of the majority of their respective industrial and retail property portfolios. But it did not have the same level of success in its bid to develop Grosvenor as a new client after the property giant opted for Slaughter and May on its £850m Paradise Street regeneration project. However, Nabarros maintains that Grosvenor is one of the group's most significant clients and it has assisted in the group increasing its turnover by £2.1m.

Herbert Smith posted a respectable 4 per cent rise in real estate turnover, from £26.7m in 2003-04 to £27.8m last year, and it has retained its position as being among the most profitable real estate practices in the UK, with RPP topping £1.6m annually.

Whether Wragge & Co has achieved its stated aim of being the number one real estate practice in the UK is debatable. However, the group is celebrating after reporting a 9.3 per cent increase in real estate revenue. Real estate operating profit is understood to have risen by more than 20 per cent. Wragges real estate head Adrian Bland attributed the results to the group's high leverage ratio (currently nearly five lawyers to every partner), targeting the right quality of business and better financial management.

SJ Berwin's real estate practice also had a strong year, with profitability in the group outstripping that of the firm's core corporate practice. Real estate turned over £25m last year, representing a 9.6 per cent increase on 2003-04, with group head Bryan Pickup budgeting for a similar increase in the current financial year.

Two mammoth deals powered SJ Berwin's real estate practice last year: its work for Brixton on the acquisition of Industrious Holdings and its advice to Nick Leslau's Prestbury Holdings on the Travelodge sale-and-leaseback. In recent years, the real estate group has sought to diversify its client base, such that while British Land remains its most significant client by revenue, its contribution to turnover has fallen relative to other major clients such as Brixton, Axa and Matrix.

2004-05 also saw the firm acquire real estate capability on the Continent for the first time with the hire of a Paris partner. Pickup now has plans to acquire a capability in Germany to capitalise on inward investment into the struggling German market.

The results should finally lay to rest the notion of real estate as a marginal practice area, inferior to its corporate and finance cousins. If real estate partners are swaggering even more than usual this year, the figures explain why.