An additional 2.6m sq ft of UK studio space needs to be built by 2028 to keep pace with the projected £2.4bn increase in film and high-end television (HETV) production spend, according to new data provided by Knight Frank.
The firm’s ‘UK Film and Television Studios Market Report’ states that every £1bn invested in film and television requires an additional 1.1m sq ft of space and although activity in the sector has slowed recently due to a writers and actors strike in the US, Knight Frank expects annual investment in UK production will increase from £6.3bn to £8.7bn per year by 2028. This would create a requirement for 2.6m sq ft of additional studio space.
At the moment there is 3.8m sq ft of studio space in the long term development pipeline in the UK, with just 852,000 sq ft under construction. In the first half of this year only eight schemes were consented compared with 17 in the same period last year.
Knight Frank said a sharp increase in build and financing costs is currently impacting the viability of some schemes. It also noted that many of the large streaming services have already acquired the majority of the studio space they need, so the bigger opportunity was for smaller specialist facilities.
Freddie Owen, partner, capital markets, at Knight Frank said: “The supply and demand fundamentals of the film studio market over the last few years has led to significant interest from investors for both operational assets and those let on a longer-term basis which offer more secure rental income. With the expected growth in demand, driven by further content creation, there will be exciting development and investment opportunities, especially within the smaller scale, operational segment of the market.”
Paul de Carvalho, head of studios at Knight Frank, added: “While the Hollywood writers’ and actors’ strikes have cooled demand for UK studio space in the short-term, we anticipate demand to rebound strongly over the coming years with development of new facilities initially struggling to keep pace. At the same time, the US strikes have highlighted the dependence of the UK industry on US productions, which studio developers will need to take into account.”
