Hot: Studios. Not: Flex Office.
At what point does it make sense to forget flexible offices and devote the floorspace to flexible something else?
A London flex operator has decided that point is now, as evidence mounts that flexible office space pricing is failing to stage a recovery.
Purpose, a flexible workspace provider, has chosen to turn the 201K SF former Jehovah’s Witnesses HQ in Mill Hill, North London, into studios rather than more conventional workspace.
The missionary base has been converted with an eye to the film and TV production business. Purpose said it will be one of the largest and highest-quality filming spaces in the capital, filling a significant gap in the UK market.
Streaming companies are taking an interest, Purpose said.
The building includes five studios and four offices, a dining hall for 300 and an acre of woodland.
The decision to convert for film production, rather than into straight offices, comes amidst excitement about the growth potential for UK film and TV production and predictions of a growing shortage of production floorspace.
JLL said earlier this month that the pressure for new studio floorspace is growing because existing studios are seriously oversubscribed. Today the capital's 3.4M SF of permanent stage space is reported to be 95% to 100% occupied for the next 12 months.
JLL said up to 2M SF of temporary stage space needs to be created to meet production demand. Some of this may become permanent.
Purpose's decision also reflects continued price stagnation in the flexible office sector. H1 2021 prices per desk in the London area were still sharply down on pre-pandemic levels, hovering around £510 per desk, compared to an H1 2019 figure of £595, according to brokerage Work There. A modest 9% lift since the super-depressed prices of H1 2020 does little to change the big picture.
Work There data also shows that the discount available to flex occupiers in the capital is growing, not shrinking. It is now possible to secure a 23% discount, contrasting with the 8% to 10% available in the same period in 2020 and 2019.