Plot Twist Or Spoiler? Film Studios Break Into London's Prime Urban Logistics Location
The low-intensity invasion of London industrial locations by a hyperactive film and TV production sector has been underway for 18 months. But now the story has taken a dramatic twist, snatching units from under the nose of urban logistics firms in West London’s hottest warehouse location.
The units, built in 2017 and branded as ‘Rock 'n' Roll’, will house three film production stages of 23K SF, 11K SF and 5K SF, in addition to other shooting spaces, workshops and office facilities. Conversion work is expected to complete in Q2 2021. Additional spaces will be completed and introduced to the complex in due course, allowing versatile stage configurations across multiple buildings.
The film studio replaces a retail business.
The rent roll for Rock 'n' Roll is £1M, the equivalent of £16/SF, and by no means the top price for this neighbourhood or a property of this vintage. This year investors have regularly bought at rents north of £17/SF, and sites described as 'uber-prime' inner London transact at more than £20/SF.
Unlike previous film industry signings, where the main impetus for landlords has been rents in the range of £40 to £50 per SF, in this case relative longevity of income seems to be the appeal. The tenant has agreed a 15-year lease.
Aviva Investors has stepped into a growing market, spurred on by the surge in lockdown online movie downloads. Studio expansion at the main London production centres of Shepperton and Pinewood has not kept pace with demand. Since 2018 both have been let to producers — Netflix and Disney — on 10-year leases, further diminishing supply, CBRE said.
Many other studios report that they are near or at full practical occupation. Industry estimates suggest unsatisfied demand worth £2.8B between 2015-2017, before the current surge began.
A shortage in the supply of large warehouse units suitable for conversion is also cramping expansion, with new-build costing up to £300 per SF and conversion costing £40 per SF.
The project comes with planning permission, and Hackman’s plans include up to 12 soundstages and 3 acres of backlot, offices and ancillary space, totalling more than 500K SF.
Last year private equity firm Aermont refinanced the Pinewood studio company, which has studios to the west of London, at a valuation of £1.15B after Disney and Netflix took long-term leases at its sites. It bought the complex in 2016 for £365M.