COMMENT The film industry is one of the UK’s most celebrated success stories. You only need to think some of the silver screen’s greatest heroes and film franchises – James Bond, Lord of the Rings or Harry Potter – to get an idea of the influence that Britain has had on the art form.
Behind the cameras lies an equally exciting tale: that of the film industry’s meteoric rise to becoming an economic powerhouse. In an unprecedented year, feature film and high-end television spend in 2019/20 was £3.6bn, according to the British Film Commission – £200m higher than the previous 12-month period, and the highest since records began.
In fact, film, TV and the wider creative industries are growing at five times the rate of the UK economy as a whole. What explains the industry’s remarkable growth and resilience? There are four core factors at play.
Out of space
First, a generous system of tax credits for productions based in the UK. If a film meets a minimum UK spend requirement of 10% and follows certain cultural criteria, then 25% can be claimed off the tax bill. In practice, large Hollywood productions filmed in the UK almost always meet these criteria, taking advantage of the uncapped budget limit and saving millions in the process.
Secondly, the UK boasts a world renowned, pre-existing workforce ready to take up projects. This means major blockbusters can be crewed entirely locally.
Thirdly, Britain boasts unique locations with a vast array of historical buildings and landscapes that can act as scenic backdrops that may be hard to find elsewhere.
Finally, the British film workforce has cultivated leading specialisms crucial for making films, particularly relating to VFX, animation and post-production.
These pulls are sufficiently strong that demand is outstripping supply. So much so that the lack of purpose-built studio space has been a pressing issue for several years, with Lambert Smith Hampton predicting that the creative industries are in need of a further 1.9m sq ft of studio space.
This clear demand is creating a huge opportunity for investors, pension funds and insurers across the world to diversify their portfolios and shift exposure away from retail and offices – two markets that have been hard hit by changing consumer behaviours and Covid-19.
On top of our work in the science and technology sector – where we are working to boost the industries that will power the UK economy in a post-Covid, post-Brexit world – Bidwells has set out to address the mismatch and open up investment opportunities. This year, we submitted proposals to build the UK’s largest-ever film studio complex in north London. Branded Hertswood Studios, the 90-acre development – equivalent to 45 football pitches – will provide 1m sq ft of new studio space, create 14,500 new local jobs and contribute over £1bn to the UK’s economy.
In the last year or so, we’ve also led on plans to deliver Shinfield Studios, a new 1m sq ft complex in Reading backed by Commonwealth Real Estate LP. The scheme, which was recently granted planning permission for 140,000 sq ft in phase one, will deliver much-needed high quality studio space in the UK.
Creative anchor
The UK government has recognised that film and TV studios are a unique economic and cultural proposition, highlighting “the impact that creative anchor institutes can have on pride and economic performance in an area”, and citing film and TV studios as an example of how creative businesses and local investment increase employment and share spill-over benefits across the area and the supply chain.
But efficient delivery requires expertise. Building a studio isn’t as simple as renting out an old warehouse. It requires a familiarity with outfitting technologically capable buildings and constructing spaces with multiple moving parts.
However, as evidenced through the UK’s already world-leading role in film and TV production, Britain has the resources, skills and capacity to deliver the space required by the globe’s most famous production houses.
Bond, Baggins and Potter add an internationally recognisable face to an already convincing set of pull factors for producing cinema and TV in the UK. The time has come to capitalise on their charisma by providing our creative industries with the world-class studio space it deserves.
Iain Keys, partner, fund management, Bidwells
