Take Two: Why The Boom In UK Film And TV Studio Development Might Be A Special Effect
Nikal’s slow-moving proposals for a 30-acre film studios-anchored Birmingham development are still very much alive, Chairman and Chief Executive Richard Fee said. But the project is emblematic of wider trends in a sector that has attracted much attention recently.
The Mercian Studios plan, intended for a site in Digbeth, has been gestating since 2019: Progress is expected before too long.
JLL said the pressure for new studio floorspace comes because existing studios are seriously over-subscribed. Today the 3.4M SF of permanent stage space is reported to be 95% to 100% occupied for the next 12 months.
However, a combination of commitment-shy tenants and developers who aren’t serious about studio development could mean predictions of rapid growth in studio floorspace remain unfulfilled.
The report said that to meet growing demand, up to 2M SF of temporary stage space needs to be created to meet production demand. Some of this may become permanent.
It is fairly certain that another 920K SF of permanent stage space will be built by 2024. “This is space that has planning consent and the owners have either made a clear expression to build it or are underway,” JLL’s report said.
Beyond that, the apparent boom in proposed studio floorspace should be treated with caution. Whilst proposals exist for 3.6M SF, all but 600K SF has yet to obtain planning consent.
“It will be interesting to observe just how much of this space is brought to the market, and crucially how it is phased,” the JLL report said, adding: “There are a number of examples where studios are being used as a planning tool to bring about a level of excitement about larger mixed-use regeneration type projects, with mixed levels of expertise behind them.”
Developers and landowners thinking of moving into the studio development game will also need to remember that the film and TV production business is precarious and changeable.
“There is a current desire from a lot of production companies not to commit to pre-leasing space, but to give firm non-contractual expressions of interest," JLL said. "This is a clear departure from the traditional real estate model of pre-leasing, raising development finance and then refinancing post-occupation."
JLL said that up to 4.5M SF of new development is under consideration in order to meet it. This is more than double the current amount of permanent stage space in the UK.
The drivers for this increase in demand are a result of the growth trajectory for the UK film and TV industries. Inward investment film production spend in the UK increased by 30.6% over the five years to financial year 2019/20; with inward investment high-end TV spend increasing by 265.5% in the same time frame. The sector has the potential to reach £6B by 2024/25, JLL said.