The real estate top 10

Foreign investment in prime London real estate and UK companies’ willingness to embrace alternative assets is keeping law firm property teams afloat. James Swift reports

Real estate is in a state of flux. The economics on which practices are based changed with the property crash in 2007 and firms are still re-shaping their teams to adapt: the Linklaters and legacy Herbert Smith (now Herbert Smith Freehills) partner culls that took place earlier this year hit property lawyers hard.

Real Estate Top 10 51112

Despite a promising start to the year, 2012 has shown little sign that the pressure is abating. One partner at a top-tier practice joked that deals were taking so long to complete in this environment that lawyers risked deep-vein thrombosis – and that was before the Olympics killed dealflow almost outright for the summer.

Still, a handful of firms’ property teams managed revenue increases in 2011-12, thanks mostly to foreign investors’ continuing interest in prime London real estate and domestic investors looking at alternative assets – such as student housing – as revenue streams.

Here, The Lawyer takes a look at the 10 top revenue-generating real estate practices in the UK in 2011-12.

1 DLA Piper

Simon Cookson

Following The Lawyer’s decision to include DLA Piper’s income as a whole, rather than separate its non-integrated US and international LLPs, the firm became the UK’s biggest revenue-generating real estate practice, with a £163.9m turnover in 2011-12.

According to UK real estate head Simon Cookson, DLA has the largest property team of any firm, with around 550 lawyers. DLA Piper plays in the mid-market more often than many others on the list, but still lands the occasional big-cap deal and is keen to move up the food chain.

London is clearly the firm’s priority, but losing four Manchester property partners – including department head Anita Weightman – to Irwin Mitchell earlier this month will still have stung.

In July the firm, led by partner Jo Owen, advised Blackstone on the £400m sale of its Nido Student Living business to Round Hill Capital, which was advised by Berwin Leighton Paisner.

2 Eversheds

Julie Stobart

Eversheds was the real estate practice with the highest total revenue in 2010-11 but was knocked off its perch this year as a result of the decision to include DLA Piper’s global revenue figures. That said, even if revenue from all of Eversheds’ international offices was included, it would still probably fall short of DLA Piper, at around £120m.versheds was the real estate practice with the highest total revenue in 2010-11 but was knocked off its perch this year as a result of the decision to include DLA Piper’s global revenue figures. That said, even if revenue from all of Eversheds’ international offices was included, it would still probably fall short of DLA Piper, at around £120m.

Eversheds’ turnover was £78.2m, a 4.1 per cent drop on the previous year, attributable to the firm moving away from bulk work, according to real estate head Julie Stobart.

Along with Ashurst and DLA Piper, Eversheds celebrated its role advising on the development of the Shard (partner Nicholas Bartlett advised LBQ as owner), but Legal & General has been its star client, providing partner Bruce Dear with work on its £305m purchase of the Rolls Building from an HBOS and Delancy joint venture in December 2011, and its financing of the Football Association’s £105m centre of excellence, opened in October.

3 Clifford Chance

Clifford Chance’s real estate department is the first magic circle team in the top 10 and third overall, raking in £74m in 2011-12.

The revenue figure was flat compared with 2010-11, but real estate was still Clifford Chance’s second most profitable group in London after litigation, according to group head Jonathan Solomon.

The firm refocused its real estate practice on large and complex corporate transactions and developments a decade or so ago, and in the past two years has also sought to whittle down its list of clients to around 15 core real estate players. One of these is Hammerson, which appointed Clifford Chance to its panel along with Addleshaw Goddard, Herbert Smith and Nabarro in 2011, and instructed Solomon on its £254.5m acquisition of the Junction Unit Trust, which comprises four UK retail parks and a development site, in October. Nabarro’s Deborah Lloyd advised the trust.


Like DLA Piper, CMS’s £67.8m real estate turnover figure includes income from all its offices for the first time, and not just those in the UK LLP.

The firm’s real estate team picked up a new client in the form of Scottish Widows in 2012, thanks to partner Edward Benzecry, and advised the investment partnership arm of the plc on its £70m acquisition of the Broadwalk shopping centre in Edgware in the first quarter.

CMS’s practice is focused primarily on investment work, and has been dragged out of the doldrums by foreign investor clients. One example is the Employee Provident Fund of Malaysia, which bought a regional distribution centre in Dartford from European Property Investors Special Opportunities in August 2011 for £80m.

5 Berwin Leighton Paisner

Berwin Leighton Paisner (BLP) may be only mid-table in terms of its turnover – in fifth place, with £62m – but the practice has been an undeniable success story. If nothing else, the steady stream of partners leaving top firms for BLP – think Robert MacGregor from Clifford Chance, Chris de Pury from Herbert Smith and James Knox from Linklaters – shows how the firm has become the property lawyers’ property practice.

The firm is now honing its sector-based approach to property. BLP has the core real estate skills off pat, but is adding gravitas to its corporate and finance teams by hiring heavyweight partners to show clients it has capabilities on both sides of the capital stack.

At the close of 2011 the firm was instructed by RBS on Project Isobel, whereby the bank handed over control of £1.4bn of distressed property loans to Blackstone.

6 Freshfields Bruckhaus Deringer

Freshfields has also been beset with talk of its real estate practice shrinking, with two equity partners said to be departing. The talk may just stem from Freshfields fitting into the high-profit mould, whereby property departments are said to be under the most pressure from falling margins.

By its own admission, Freshfields has had to adapt to the post-crash market – lower volume and lower prices – by targeting legal development work and advising on complex structures involving joint ventures and corporate-style acquisitions.

The firm has scored more than its fair share of real estate-related restructuring and refinancing deals – it advised a group of bond holders on German property portfolio Deutsche Annington’s £3.4bn refinancing in July – but its standout deal was undoubtedly advising Brookfield on its £518m purchase of Hammerson’s London office portfolio. Herbert Smith acted on the other side.

7 Linklaters

The travails of Linklaters’ real estate team – including the departure of key partners Anne Byrne and Joe Conder in 2012 – have been well-documented and left many speculating on how much capability is left within the department.

But The Lawyer estimates that the practice still brought in some £54m in 2011-12 and a spokesperson for the firm adds that so far in the 2012 calendar year the group has completed six single-asset transactions that amount to £2bn in deal value.

Partner Mark Burgess-Smith led the team that advised Ernst & Young as administrators on the £400m sale of Battersea Power Station to a Malaysian consortium advised by Norton Rose in July.

8 Hogan Lovells

Hogan Lovells’ real estate team’s near-16 per cent jump in turnover between 2010-11 and 2011-12, from £45m to £52m, was the biggest of the top 10. The firm was helped along in the 2011-12 financial year with a couple of high-profile administration mandates, for example advising KPMG asadministrators on the collapse of Peacocks.

However, for the most part Hogan Lovells’ property team has ticked along advising UK and overseas investors. In the UK this has been mainly on the sales side,although notable examples include Hermes, which bought Westfield’s half-share in a £400m portfolio containing three shopping centres in January.

Highlight deals include advising News International on its Wapping site sale to St George Central London for £150m and acting for the BBC on the sale of Television Centre in White City to a consortium led by Stanhope that was backed by Canada’s Alberta Investment Management Corporation and Mitsui Fudosan of Japan for £200m in July.

9 Taylor Wessing

Taylor Wessing’s real estate team managed a 10.5 per cent increase in turnover in 2011-12, up from £38m in 2010-11 to £42m. The firm has pencilled in similar growth levels for the 2012-13 financial year, but that would require more than a bit of luck, given that the Olympics put the brakes on activity over the summer when deals were generally moving at glacial pace anyway.

The firm won a new client in Ananda Krishnan – reportedly the second-richest man in South East Asia – when his Usaha Tegas Group acquired St John’s Wood Barracks from the Eyre Estate family trust for £250m in the final months of 2011.

Real estate partner Michael Helfgott led on the deal, although the client was initially brought in through the firm’s ultra high-net-worth team. But one of Taylor Wessing’s most lucrative real estate clients of late has been McLaren Property. Most recently the firm, led by consultant Eamonn Cannon, advised on McLaren’s forward funding of a student accommodation development in Greenwich, worth some £43m.

10 Herbert Smith Freehills

Turnover at legacy Herbert Smith’s real estate team was up by 5 per cent in 2011-12, from £38.2m in 2010-11 to £40.1m. Ahead of its merger with Australia’s Freehills in October, Herbert Smith realigned its practice, combining real estate with the finance and projects group to reflect Freehills’ set-up.

Like Clifford Chance and Freshfields, Herbert Smith Freehills aims for the big-ticket transactions. Stock clients from the Herbert Smith side include Hammerson, Standard Life, Blackstone and Carlyle Group.

In June partners Julian Pollock and David Paterson led the firm advising Hammerson on the landmark £518m sale of the company’s entire London office portfolio to Brookfield, which was advised by Freshfields. Rowlands also advised the Canada Pension Plan Investment Board on its joint venture with Land Securities – advised by Freshfields – for a £1bn redevelopment project near Victoria Station.