After Blockbuster Years, Developers And Producers Call Cut On UK Film Studio Real Estate Expansion

The UK film studio industry entered 2025 at a crossroads, just two years after enjoying record revenues.

Riding high on seemingly endless streaming money as U.S. media giants fought over subscribers, Britain became the go-to filming location and basked in its global reputation, rich history, skilled workforce and state-of-the-art facilities.

Major platforms such as Netflix, Amazon Prime Video and Disney+ have turbocharged famous studios such as Pinewood, Shepperton and Leavesden — and as always, the real estate industry was not far behind, with both global and local investors unveiling plans for millions of square feet of new studio space across the country.

However, in 2024 the clapper board slammed shut. A reduction in original drama output by the streaming platforms, magnified by the ongoing impact of the Hollywood writers’ longtime strike and actors’ industrial action, saw production spending drop sharply.

Now, many of those new studio plans are on ice, as real estate investors are left wondering whether they have backed a blockbuster or a box office flop.

“Investment demand for top-grade, purpose-built existing facilities of scale remains robust. Investment in development sites is proving harder to come by than a couple of years ago,” CBRE Senior Director, Operational Real Estate Matthew Hopwood said of the impact.

“The flurry of transactions postpandemic has since slowed, and interest in taking new master lease agreements has fallen away, at least in the short term. In addition, build costs have increased, making the required financial returns harder to achieve on speculative developments.”

Total stage space in the UK stands at 6.9M SF, according to a 2023 report by Knight Frank, with 1M SF added in the 12 months preceding publication.

U.S. media companies such as Netflix and Amazon MGM Studios took long leases at studios such as Pinewood and Shepperton, both owner by Pinewood Group. These block bookings, which until the past five years were incredibly rare in the UK studio sector, forced many smaller filmmakers to hunt for alternative venues, leading to a surge in real estate investment in studio infrastructure.

However, the downturn has left many questioning the logic of expansion, with the British Film Institute reporting that the combined UK film and high-end television production spend for 2023 dropped to £4.2B, 32% down on a record £6.3B in 2022.

Pinewood has been the biggest beneficiary of the influx of production money into the UK. Bought by real estate fund manager Aermont in 2016 for £326M, the business was recapitalised through a £2.9B equity raise in 2022, with the value uplift driven by those long leases. 

But at the end of last year, the company issued a warning that the period of such leasing deals was all but over. 

“Globally, production activity is ramping up following the 2023 strikes, but it is evident that we will not be returning to the content production growth profile witnessed through the ‘streamer wars’ during the pandemic,” CEO David Conway said in a statement to company bondholders.

And there have already been casualties of the way big production companies are thinking about their output. Winnersh Film Studios in Berkshire, where Ghostbusters: Frozen Empire was partly filmed, went into administration in April 2024, citing cash flow problems linked to the strikes. Despite attempts at a sale, the studios ceased trading, with its assets sold off.

Meanwhile Sunset Studios, a venture between private equity giant Blackstone and U.S. REIT Hudson Pacific Properties, received planning permission in 2022 for Sunset Waltham Cross studios, a 21-stage facility proposed for Broxbourne, Hertfordshire.

Intended as an expansion of Sunset Studios in Hollywood, site enabling works were completed, but construction is yet to begin and is “paused,” Blackstone told Bisnow.

Home of Production, a new studio development in Bedfordshire, was given planning permission last year and was due to open in 2025, but there is no confirmation on when work will start.

In addition, some film studio projects have been blocked by local planning. Sky Studios, to the north-west of London, has appealed after plans for a northward expansion were rejected over green belt concerns after completing work on its south studio, which has hosted production for films including Wicked and Paddington in Peru. Sky had applied for permission for a circa 830K SF extension, but Hertsmere Borough Council in March rejected those plans.

Sky may take renewed hope after Deputy Prime Minister Angela Rayner called in a rejected planning application for a £750M film studio development at Marlow Film Studios after it was turned down by Buckinghamshire Council in May. The project has backing from filmmakers including Sam Mendes and James Cameron, and the site would have 470K SF of new soundstages.

However, there are grounds for optimism. The last two budgets have offered up more grants and tax subsidies.

“Studio rent is still relatively modest as a proportion of the total production cost, and the UK is able to offer a great value proposition,” Hopwood said.

The BFI also said the last few years have been a period of extreme disruption and said that it believes government tax credits and a strong skills pedigree should underpin prospects for the industry.

“The last four years have been extraordinary, as we came out of the pandemic with an accelerated surge in production activity and then another phase in 2023 of production starts rescheduling in the wake of the Hollywood writers and actors strikes,” BFI Deputy CEO Harriet Finney said.

“As a production centre, we have a global reputation for a strong ecosystem of skills, studios, and facilities and film offices. However, we are entering 2025 with a new spring in our step.”

Last year saw the new Audio-Visual Expenditure Credit and the Video Games Expenditure Credit go live, she said. This year will see an enhanced audiovisual expenditure credit for lower-budget UK films, also known as the Independent Film Tax Credit, go live in April, with producers able to backdate claims from April this year.

The expenditure credit uplift for visual effects work in the UK went live on 1 January, with the UK Screen Alliance estimating it should bring an additional £175M of spend a year and provide 2,000-plus additional jobs.

“Initiatives such as Pinewood’s package of services launched to support independent filmmaking is a great support for the industry,” Finney said. “This confidence in British filmmaking at all production budget levels also sends out an important message internationally.”

An example is Amazon Prime Video, which is acquiring the historic Bray Film Studios in Water Oakley, Berkshire, with approximately 53,600 SF of studios, five soundstages, 77,400 SF of workshops, 39,400 SF of office space and 182,900 SF of backlot. Bray Film Studios has been the production home for The Lord of the Rings: The Rings of Power since 2022, and the second season of the spy series Citadel has moved to the studio.

Big streaming companies may be changing the nature of their output, but some are still financially successful and will continue to invest in new content, which will need to be made somewhere.

“Netflix has reported fantastic financial results and within the industry is undoubtedly the streaming king,” said Kathleen Brooks, research director at financial analysis firm XTB. “There has been a slowdown, but that comes off huge growth in the UK, and the industry is set to grow again in 2025 because companies like Netflix have laid down roots in the UK.

“Along with Amazon, Disney+, Paramount and Peacock, there remains huge demand for British production facilities because, although filming locations are important and we’ve seen collaborations between multiple international locations in complex series such as Game of Thrones, the editing and special effects come back to the UK. The infrastructure from production to lawyers to finance is a real benefit for London and the wider UK.”

Warner Bros. is planning a 400K SF expansion at its studios in Leavesden and has confirmed that production of the new HBO TV series Harry Potter will start at the studios next year, intended as a decade-long project.

Meanwhile, work started last December in Liverpool on a film studio on the site of the former Littlewoods Pools business, and the £70M development plans were approved in October.

The designs from developer Capital & Centric, created by architect Shedkm, aim to restore and repurpose the 1930s Edge Lane site into a new creative hub. The project will include the development of two 20K SF studios, along with office spaces, workshops, studio support facilities and an education centre.

A £450M planned Crown Works studios in Sunderland, agreed in a devolution deal with the government and north-east, was also confirmed by Chancellor Rachel Reeves in the autumn statement. Crown Works Studios is a joint venture between Cain International and Fulwell73, with completion expected in 2027. 

John Sullivan, founding director of leisure consultancy The Big Picture, conjured a scene that is not uncommon in the property sector.

He said that real estate “does tend to get behind the next big thing without a huge amount of long-term analysis” and cautioned that content production is “somewhat built on shifting sand, because the tax environment, demand and competition all play their part in determining where filming takes place.”

“If another country set up a more favourable tax regime, that would bring fresh competition.”

Lambert Smith Hampton Director Chris Berry is marketing London's 130K SF Wimbledon Studios, best known as the permanent set for long-running police drama The Bill, which he describes as a “hybrid” site ideal for a small TV channel or an advertising company in need of content production facilities.

“It’s difficult to overstate the impact of the Hollywood strikes globally,” he said. “And on top of that, the streaming channels are now focusing on profitability over new subscribers, which significantly changes the landscape.”

Like Hopwood, Berry said he believes that much of the current development pipeline will not be built out. The government-backed regional developments are more likely to get the go-ahead, thanks to subsidies, and may appeal to U.S. production studios looking to reduce costs by filming some shows in cheaper locations. Bristol has so far been the major benefactor of the political desire to spread studios beyond the dominant London and south-east.

“Despite the hit taken because of the strikes and the cutbacks by the streaming services, most UK studios bookings going into 2025 are pretty healthy. And on top of that, there is a general push for U.S. production to be spread more globally, which the UK could benefit from,” he said. “However, the regionals will remain very much a secondary market.”

Even if the sector divides to see larger production companies focusing on the major studios and indies spreading across the smaller sites, Berry said that the analogy with more traditional commercial real estate, with large occupiers on long-term contracts and more ad hoc bookings for smaller space, is more nuanced.

“Even for the major, long-term bookings, companies like Pinewood will have a lot of staff on-site managing the process with the content providers, so this is a very hands-on type of investment,” he said. “But regardless of whether the total pie gets smaller, if the UK can get a bigger slice, then that will make for a stronger market. And if we have a good 2025 and bookings are healthy for 2026, we really should see the market back.”