Freshfields Bruckhaus Deringer has signed a permanent lease for its global services centre in Manchester, with staff to move out of Arndale House in early 2017.
The magic circle firm has leased 80,000 sq ft of space in new build One New Bailey in Spinningfields.
Rents on the building are understood to be around £33 per sq ft, putting Freshfields’ rental costs for the centre at £2.64m. The firm is understood to already pay upwards of £10m for its 230,000 sq ft Fleet Street offices.
The Manchester lease also allows for further expansion of its office space, said centre director Anup Kollenathu.
“One New Bailey gives us both the high quality and attractive location we want for our staff,” he said. “The developer has granted us valuable flexibility to adapt, up or down, the amount of space that we would occupy to reflect the evolving needs of our clients’ and our business.”
Kollenathu took over the running of its legal services and back office hub in the northern city in May alongside corporate partner Gareth Stephenson.
The firm originally signed a lease to take on 40,000 sq ft of space at Arndale House, part of Manchester’s Arndale shopping centre in March, while it waited for a number of commercial new builds to be completed in the city centre.
The permanent premises is expected to hold up to 300 staff, though the firm has remained silent on its predicted final headcount.
Back office staff such as IT and payroll were moved from its Fleet Street offices originally, with legal services staff and paralegals both relocating and recruited this summer.
The centre will also be home to its HR, IT, marketing and business development, office management, document specialist and change management staff.
The firm instructed Knight Frank on its ‘northshoring’ requirement at the start of this year as part of plans to cut renting costs.
Prime rents for office space in Manchester are currently around half the average £65 per sq ft rent charged around Fleet Street.
Freshfields will need to downsize its London offices to benefit from the lower costs of its Manchester base. The firm’s lease on Fleet Street is understood to be up for renewal in 2022.
Hmm, so that’s an annual rent of around £2.5m. Just out of interest, does anyone know (1) would Freshfields probably have acted for themselves in the matter; and (2) what sort of fees would be payable for a deal like this (a) in London and (b) in Manchester?
quite appropriate for this office that its on the site of an old prison
Are you kidding me? “Market sources have speculated Freshfields will need to downsize its London offices to benefit from the lower costs of its Manchester base.” Hopefully The Lawyer doesn’t need to ask for anyone’s help in developing that hypothesis….