Can you make money building film studios in Liverpool?
Probably not, says developer Tim Heatley, the man who is building a film studio in Liverpool and seriously thinking about building a second. The site he has chosen – the 250,000 sq ft former Littlewoods HQ on Edge Lane (right) – is a “headache”, says Heatley, and it is going to cost him about £25m (see box, right).
Mad, eh? Surely this feels less like property development than the scenario for a heart-warming Scouse film drama – the kind in which colourful ambition overcomes grim reality, and where everybody is either a cheeky chancer or looks like Paul O’Grady in a frock?
Actually, no. This is a real plan. And it might just work. Heatley and Adam Higgins, directors at Manchester-based Capital & Centric, plan to convert the Littlewoods Building into a media hub. A 20,000-25,000 sq ft sound stage will form the centrepiece of a 4.6-acre campus which will house the Liverpool Theatre School and a host of film-industry suppliers – from wig-makers to lighting designers, costumiers and CGI/animation houses.
Further phases could add considerably more floorspace on the neighbouring 10-acre Liverpool Innovation Park.
The idea has the backing of Liverpool city council, which says the city hosted 120 productions in 2014. Performance will be 20% up this year thanks to films including Florence Foster Jenkins, starring Meryl Streep and Hugh Grant. But the council calculates that it missed out on £20m of revenue last year, thanks to limited film facilities. The Littlewoods project could help recapture it.
“The hardest bit is knowing exactly what to build,” says Heatley. “We spent a lot of time talking to studios and production companies, and they all have a different take on what is required – height, ventilation, facilities, green walls for CGI. We have to find a good optimum that won’t price us out of the market.”
Making money from a studio is hard. Show business – there’s a clue in the name – lives on the fur-coat-and-no-knickers principle, so extracting top rents for a sound stage is out of the question.
“Film people are good at making it look fantastic on screen but not spending much. They want their money to be visible on the screen – they want to spend on people and props, not on premises. It doesn’t matter to them what it looks like behind the scenes,” says Heatley.
“We are not going to make money on the studio – the sound stage – but we will on the facilities you provide around it, the catering, hair, make-up, post production, tech. The studio is not a revenue-generator – remember, film-makers could perhaps go to a cheap warehouse down the road – so think of the studio as the anchor around which we build the rest. It is the equivalent of Debenhams in a shopping centre, or the cinema in a restaurant development.”
The aim is to build a creative cluster that can keep post-production spending in Liverpool and allow businesses to feed off one another. If it works, it will save occupiers time and money and make them useful contacts into the bargain.
None of this comes cheap. Land will take around £3m of the budget, another £17m is needed to convert the Littlewoods Building itself – “a headache, it’s vast”, says Heatley. That leaves about £5m for the sound stage, fit-out and fancy media wizardry.
Even so, Heatley believes the sound stage will be booked from day one. “There will be demand the moment we are complete, so much so that we are looking at building another one on site. That is feeling increasingly likely,” he says.
Let’s do the show right here
Cains’ Brewery in Liverpool is about as atmospheric as spaces get. The 170,000 sq ft listed building has been empty since brewing stopped in 2013 – and then the film folk moved in. Temporary lets to film-makers have led to the site being featured in the likes of Celia, Foyle’s War, Close to the Enemy and Hollyoaks. It fills the time nicely until a developer comes forward to build 725 flats and 1m sq ft of mixed-use space.
Industry insiders say a big-budget TV commercial might pay £1,000 a day for a location; a low-budget editorial photoshoot just a few hundred pounds in total. Most fall on the lower side.
Sudarghara Dusanj, managing director at Cains, says: “We have been pleasantly surprised by the demand. We let them some offices – about 4,000 sq ft a time – and the film-makers come to film, sometimes for up to six months for projects like Foyle’s War. It keeps the brewery occupied and in good repair, but we don’t make much money from it. And it keeps us in the public eye.”
A four-star hotel operator is said to be considering the Cains site and other interested parties are circling. “I would like to be able to make some announcements about developers and occupiers before next summer,” says Dusanj.
Site, camera, action
The 250,000 sq ft Littlewoods Building on Liverpool’s Edge Lane has been empty since 2003 and defied half a dozen attempts at redevelopment.
The 4.6-acre site is being sold to Capital & Centric by the Homes & Communities Agency. The back-to-back deal, now nearing completion, is understood to be valued at around £3m for a 250-year lease. A planning application is expected by spring 2016 and the first filming could take place by autumn 2017.
Funding is from Capital & Centric’s own resources – no names are mentioned, but the firm is known to be on good terms with a host of Premiership stars, including Liverpool’s Luis Suarez, Lucas Leiva and José Enrique; and Arsenal’s Santi Cazorla and Mikel Arteta. A second 20,000 sq ft studio sound stage may require around £2m public sector gap funding.
Capital & Centric first spied the Littlewoods Building during its £4m development of the neighbouring 22,000 sq ft Bunker. About 7,000 sq ft is let at rents of around £13 per sq ft.
