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Netflix is in talks to lease space from Pinewood Studios, which would further boost the value of the famous film studio for the real estate firm that bought it in 2016.
According to the Financial Times, Netflix is in advanced talks to lease what could be its largest European production facility, to help it fulfil its ambitions of spending more than $8B on new programmes annually.
Pinewood owns two main U.K. sites, both to the west of London: Pinewood and Shepperton. The FT said that Netflix has written to the local council in support of the planning application for the £500M expansion of Shepperton, which would add 465K SF of additional sound stage space. Overall Pinewood has 1M SF of studio space across 74 stages in five countries.
A lease to Netflix would further boost the value of the Pinewood business for Aermont Capital, the real estate private equity firm that took Pinewood private in 2016 in a £323M deal. The company has already made a phenomenal return on its investment.
It has refinanced the business with a new £300M bond issue which values the studio company, where the James Bond franchise is filmed, at around £600M.
Netflix’s biggest studio facility in Europe is a 237K facility to the north of Madrid, according to the FT. It is on course to film 81 original productions in Europe this year and 60 co-productions, and next year that will rise to 153 original productions and 68 co-productions.
Original Netflix European series include "The Crown," which is filmed at Elstree Studios in Hertfordshire.
In a report on the U.K. film studio property sector released in the summer, Lambert Smith Hampton said of Netflix: “It has not, to date, taken any long-term leases in the U.K., but it has signed 10-year agreements in the U.S., suggesting that it is prepared to take on relatively long leases.”
The report added that the film sector is growing at such a pace in the U.K. that 1.9M SF of new space will be needed to meet demand, against a current pipeline of just 800K SF.
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