All leasing deals on CMS’s Cannon Place premises are understood to have been put on hold ahead of its proposed three-way merger with Olswang and Nabarro, The Lawyer had learned.
The merger is widely tipped to see Nabarro and Olswang abandon their current offices at 90 High Holborn and 125 London Wall if the merger goes ahead, with lawyers moving to CMS’s offices.
Now it has emerged CMS could have asked its landlord to put all ongoing deals to sublet its empty floors on hold.
Savills and CBRE were understood to have been informed of the decision to freeze the leasing deals on Friday morning (30 September) as the three partnerships voted on the merger.
It is understood the firm made the decision on Friday (30 September) in anticipation of bringing hundreds more lawyers into the fold.
Agents Savills and CBRE have had four floors at CMS’s HQ out to market in recent weeks, a total of 80,000sq ft – potentially enough space to house both Olswang and Nabarro.
CMS is currently paying £67.50 per sq ft for its Cannon Place offices, which is far less than Olswang, which is paying £82 per sq ft for its 182,000sq ft premises (a lot of it sublet). Nabarro currently controls 100,000 sq ft.
The two smaller firms’ London premises could provide major complications to the three-way merger plan, The Lawyer understands.
Olswang holds the lease on the whole of 90 High Holborn, subletting 68,000sq ft of its 182,000sq ft premises, with 17,000sq ft still available to rent.
Its High Holborn lease expires in 2022, while Nabarro’s expires in 2025. Something tells us neither firm is likely to be there to see it go.
Sources in the commercial property market said CMS could get both firms into three floors, possibly even two floors, at Cannon Place, subject to where the overlaps are in job functions and workplace optimisation.
But with business services and lawyer CVs already understood to be flooding the market, there will be considerably less overlap than once thought if the deal is done.
The big question facing CMS is the risk that it takes on in the lease liabilities of both Olswang and Nabarro. The firm is expected to have to underwrite the rental liability for both firms if the merger goes through.
Many a law firm merger has gone south because of property issues.
This year’s The Lawyer’s UK 200: Workspace Trends 2016 report (produced in association with JLL) underlined the key position a firm’s property now plays in terms of strategy and future wellbeing in extensive detail.
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