Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The BBC has agreed to sell the Elstree studio complex that is home to soap opera EastEnders to French insurance company Axa, providing a financial boost of up to £70mn for the cash-strapped broadcaster.
The insurer’s investment arm, Axa Investment Managers, will buy the 16-acre complex near Watford, north-west of London. The BBC will take a 25-year leaseback of part of the facilities and continue to film there after the deal completes early next year.
The BBC launched the sale of the site in 2022, seeking £70mn. It faces a cash crunch after the government froze the licence fee for two years in 2022 as inflation rose sharply and set a strict limit for increases from April this year.
The funding squeeze has already forced the broadcaster to cut spending on news services, including on its flagship Newsnight programme, as part of efforts to save £500mn. However, it hopes to increase revenues from making and selling programmes through its BBC Studios arm.
Alan Dickson, BBC chief finance officer, said that the sale of the Elstree Centre was “part of an ongoing review of the BBC’s property portfolio in order to provide the best value for licence fee payers”.
Elstree has been a centre of UK television and film production for more than a century. The BBC bought its studio there in 1984, the year before EastEnders was first broadcast. The site is also used for large studio productions such as the BBC Children in Need charity telethon.
The deal is the latest sign of investor interest in the UK’s studio sector, which has become a key part of the Hollywood film industry thanks to its skilled workforce, advanced film technology and tax breaks.
FulwellCain, which is part-owned by actor James Corden, is working with Sunderland City council to try to win approval for a £450mn film studio complex on the banks of the river Wear in north-east England.
Sky has also just opened new studios in Elstree, which will be the location for the next Paddington movie. Warner Bros Discovery plans to increase capacity at its studios north of London, while another studio complex is being planned at Marlow in Buckinghamshire.
The BBC Elstree deal is the second recent big studio acquisition by Axa, which says film and TV production space near big cities is in short supply and represents an attractive niche for real estate investors.
“This is possibly the most established studio location in the UK. We like the idea of something that works, but also something that can be improved,” said Axa IM’s global co-head of real estate John O’Driscoll.
Axa is finalising plans to invest in expanding the studios and adding support facilities. It remains enthusiastic about studio investment despite intense pressures on production budgets at streamers and broadcasters.
O’Driscoll said “content producers are more conscious of cost today than ever” but added that demand for reliable, well-located studio space remained strong. Blackstone is among the other investors who have invested in studio space near London.
In June, Axa agreed a €150mn deal to buy Bry-sur-Marne Studios, east of Paris, which produced Sofia Coppola’s 2006 film Marie Antoinette and the recent screen adaptation of Astérix and Obélix.
