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Jones Lang LaSalle reveals emerging market expansion driven by multinational firms from the West seeking local offices in high-growth economies
London, October 25, 2012 — Strong economic growth in emerging markets is driving law firm office expansions across the Asia Pacific and Africa regions, according to Jones Lang LaSalle’s Global Law Firm Perspectives 2012. The study, an annual barometer of law firm real estate trends around the world, characterizes a performance gap between advanced and emerging economies–and a renewed interest from large law firms in bridging that gap.
“Law firm real estate trends vividly illustrate current global economic polarisation,” explained Tom Carroll, Director - Corporate Research, Jones Lang LaSalle. “While firms focus their sights on high growth emerging markets in Asia and Africa, a tenant favourable market will continue in North America and much of Europe for quite some time.”
The report reveals the following key worldwide legal industry real estate trends:
Variable Rental Rate Cycles
“In global markets, law firm rents are influenced more by overall market conditions than by legal industry trends,” explained Carroll. “Many markets are recovering economically, but still offer low rents because the market cycle has yet to drive rate increases.” Incentives (or lack thereof) can vary from market-to-market as well.
For example, consider the following contrasts:
“Rents are highly variable city-to-city, even within the same region or country,” said Richard Proctor, , Head of Central London Tenant Representation and Lead Director, EMEA Law Firm Practice, Jones Lang LaSalle. “Firms can find deals where rents are just beginning to rise, but remain close to the market bottom. It is critical for law firms to apply their forensic skills to their real estate portfolios to achieve an optimal outcome.”
Tenant mix influences market trends
"’As go law firms, so goes the office market’ is a sound guiding principal for North America,” explains Elizabeth Cooper, Jones Lang LaSalle International Director and co-chair of the firm’s law firm practice. “In contrast, anchor tenants in Europe, Asia and North Africa are more likely to be corporations, so law firm trends are not market-movers in quite the same way.” In the U.S., law firms lease, on average, more than 15 percent of Class A office space in urbanized markets. In contrast, only two cities outside North America show law firms leasing more than 10 percent of Class A office space in the central business district.”
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47 billion of assets under management. For further information, please visit www.joneslanglasalle.com.