Halliwells Collapse Brings Caution to Conventional Office Lease Industry
David Lathwood of King Sturge in Manchester claims that the collapse of law firm Halliwells, which blamed much of its ┬ú22m debt on office costs, says that landlords will now look very closely at professional firms before agreeing office lease deals.
“For the time being the kind of deal done by Halliwells is gone,” said Mr Lathwood, according to the Manchester Evening News.
“For perhaps the next one, two or five years that kind of deal won’t be in the market. No doubt it will come back, though, because some mistakes are made again and again and again.”
Mr Lathwood suggests that following the troubles experienced by Halliwells, a law firm which previously occupied office space in prestigious Manchester city centre development Spinningfields, landlords will not regard signing leases with professional firms as entirely safe.
“How will big professional firms get office buildings in the next few years? They won’t, it is as simple as that.”
He predicts that many professional firms will be more likely to refurbish or adapt their existing space, rather than take on brand new high-profile offices such as Spinningfields.
“I think we’ll also see landlords looking very closely at professional firms,” he added.
Research by King Sturge claims that professionals will account for 20% of all office space let in the city centre this year, which is said to be significantly lower than the level seen in former years.
The financial services sector are expected to account for around 40% to 45% of all office lettings in 2010.