Spotlight on film industry’s property needs

New Zealand’s world-class film crews, diverse locations and competitive cost structures are attracting significant interest from international production companies keen to optimise their filming dollar and capture discerning box office and television audiences. 

In Bayleys’ latest edition of Total Property magazine, the commercial property implications of this growing production demand are put under the spotlight. 

Bayleys’ national director commercial real estate, John Church, says the screen production industry is a niche sector which bats above its weight internationally. As a result, it has growing infrastructural demands if it is to keep up the pace.

“From a commercial and industrial property perspective, the space implications are diverse,” he said. 

“With Government incentives encouraging international film companies to work in New Zealand, the squeeze on existing resources is prompting discussions around infrastructural and property needs in the immediate and long term.”

In 2005, Waitakere mayor Bob Harvey sought to make Henderson Valley the “Hollywood of the South Pacific”. While Harvey’s bold vision has not been fully realised, there are currently three film industry complexes in West Auckland – Auckland Film Studio, Studio West, and South Pacific Pictures.

Meanwhile, industry luminary Sir Peter Jackson’s film empire has put Miramar, Wellington, firmly on the global stage.

Mr Church, says the ‘Jackson effect’ has rubbed off on the suburbs of Rongotai and Kilbirnie, with wide acceptance that property values in these areas have escalated on the back of the film industry connection.

“It is estimated that more than 10 hectares of primarily Business 1-zoned land is owned by wider film industry interests in Miramar, Rongotai and Kilbirnie, with additional commercial property leased from the airport and private owners in the area,” he said.

“Most of the buildings and associated infrastructure are high-end and purpose-built for the industry.”

The film sector employs more than 5,000 people in Wellington and contributes significantly to the region’s economy. The latest Screen Industry Survey says Wellington remains the country’s film capital, with businesses earning $645 million from feature film revenue in the last financial year.

The region’s economic development agency Grow Wellington chief executive, Gerard Quinn, says Wellington has a solid infrastructure of world-class facilities built up over the last 20 years, located near to each other and to amenities such as the airport.

Wellington City Council’s 10-year plan identifies film and technology industries as vital to the city’s future prosperity. Mr Quinn says Grow Wellington expects to see continued growth in the sector as the revamped government screen incentives help to produce more project revenue, along with jobs and wider benefits for tourism, technology and education. 

“The screen sector also provides opportunities for non-CBD commercial property to thrive as it requires large amounts of space in warehouses and similar facilities.”

The purpose-built television production facilities at Avalon in Lower Hutt caters for a resurgence in television production being seen in Wellington.

“The boom in high-end television and various online formats such as Netflix mean TV is now even more commercially viable,” Mr Quinn said.

Film New Zealand, this country’s national film office, is contracted by the government to market and promote New Zealand’s screen production industry abroad.

Its chief executive Gisella Carr says New Zealand is well-resourced in terms of available film industry infrastructure, but there are some factors that may hold the sector back.

“Often, studio space is at a premium and it is not uncommon for productions to re-purpose existing commercial and industrial buildings for use if existing studio space is not available,” says Ms Carr.

“Solving sound stage/studio capacity is a complex issue that requires long term thinking.”

The Auckland region’s economic growth agency, Auckland Tourism, Events and Economic Development (ATEED) is focused on helping fuel the screen production industry and works closely with a range of private and public sector partners nationally and internationally.

ATEED chief executive, Brett O’Riley, says according to Statistics New Zealand data, Auckland accounts for about 45 percent of the national production industry, and injected around $650 million into the Auckland regional economy in 2014.

“Demand for space from both domestic and international productions is high,” says Mr O’Riley.

“However, the Auckland region is missing opportunities to secure both large-scale international and domestic productions because of the limitations of the current studio infrastructure.”

Mr O’Riley says even prior to a fire which damaged the Auckland council-owned Auckland Film Studios (AFS), the facility was only capable of housing one major production at a time.

“The growth of the sector in Auckland has put pressure on current alternative sites such as converted warehouses,” he says.

“This is not a viable long-term solution for Auckland because of the inefficiencies involved in securing and repurposing these sites.”

A site currently occupied by former air force hangars at Hobsonville Point – Auckland’s newest master-planned community – has been touted by ATEED and others as suitable for a purpose-built film studio operation. 

Auckland Council recently gave the green light to a film studio campus on the ratepayer-owned land, as long as a commercially viable plan from ATEED is on the table by October 31.

“Auckland is already a leading destination for international film makers and the domestic industry but there is substantial growth potential based on a purpose-built film studio precinct such as the one proposed for Hobsonville,” Mr O’Riley said.

“This would be able to cater for simultaneous multiple large-scale productions, and would reflect the latest industry technology.”

Read the full article The Reel Deal in Bayleys’ latest Total Property magazine.

Jody Robb writes for Bayleys Real Estate