Q&A: James Seppala on Expanding Blackstone’s Content Creation Reach in the UK
The UK’s film and television industries have been undergoing extraordinary change and growth driven by demand for new high-end content. According to government regulator Ofcom, UK adults spent nearly a third of their waking lives consuming TV and online video content in 2020 with time spent on streaming services almost doubling from 2019. However, UK film and TV studios are struggling to keep up with this explosive growth. A recent report from real estate consultancy Lambert Smith Hampton estimates that 2.3 million sq ft of new sound stage space will be required by 2033.
Blackstone and Hudson Pacific Properties have announced plans to create a major new center for film, TV and digital production in the UK which is an expansion of Sunset Studios in the US. The £700 million ($1 billion) development in Broxbourne, Hertfordshire, to the north of London, is expected to create over 4,500 jobs and contribute £300m annually to the local economy and help meet the UK’s growing need for new state-of-the-art production space. We sat down with James Seppala, Head of Real Estate Europe, to discuss what is in store for Broxbourne.
Sunset Studios is one of the largest independent studio operations in Los Angeles and manages almost half of all studio space in Hollywood. Upon the completion of Sunset Glenoaks Studios in Sun Valley, California, Blackstone and HPP will collectively own and operate under its Sunset Studios platform 42 stages or 3.5 million square feet, including development rights, of Los Angeles area studio facilities.
The studio has hosted some of the biggest film and television hits of recent decades, including When Harry Met Sally, Zoolander, La La Land, and Scandal.
James Seppala is Blackstone’s Head of Real Estate Europe, based in London.
Q: James, give us some background about the project and what we can anticipate for Broxbourne in the years to come.
We have acquired a 91-acre site on the M25, London’s major orbital motorway, to build one of the UK’s leading content production centers.
With HPP’s expertise in developing and operating state-of-the-art media campuses and Blackstone’s scale and existing market knowledge, we are confident that, together, we can create a world class facility.
Q: What makes the UK – and specifically Broxbourne, Hertfordshire – such a conducive environment for content creation?
Hertfordshire has a great heritage of film and TV production dating back decades. The original Star Wars film was shot a few miles away at Elstree, the Harry Potter films at Leavesden and the James Bond films are synonymous with Pinewood in neighboring Buckinghamshire. So we know that the employment base exists locally with the skills to do this work today, and the ability to train the next generation of camera operators, special effects designers, costume makers, and make-up artists.
According to the UK’s Creative Industries Council, the UK content creation industry has been growing at about seven times the rate of the economy as a whole. And the only thing which has held it back from growing even faster is the lack of facilities such as the ones we are planning to provide.
This site offers us the scale, connectivity and skill base we need. It’s adjacent to a major junction on the M25 motorway, making it ideal for accessibility to London’s airports, across Hertfordshire and into London. The 91-acre site provides us with the space we need to realize our vision.
Q: How does this deal fit into Blackstone’s overall investing strategy?
We are thematic investors focused on sectors with strong tailwinds such as logistics, e-commerce, life sciences and, of course, content creation.
The demand for studios is driven by the demand for content. Just to give you one demonstrative metric, the global annual content spend in 2016 was $38 billion. By 2020, that had grown to over $100 billion – so over two and a half times the original figure in just five years. Recently, we also partnered with leading entertainment executives Kevin Mayer and Tom Staggs to back Hello Sunshine – a female-driven content and media business founded by Reese Witherspoon in 2016 that is focused on sharing the narratives and experiences of women.
Through our existing studios in the US, we’ve developed relationships with both the traditional content producers and streaming giants, and they are very excited by the platform we are looking to create.
Q: This year we’ve made several big investments in the UK including Bourne Leisure and St. Modwen. What impact do you anticipate our continued partnership will have on the UK?
Blackstone has been one of the UK’s largest foreign investors since the inception of our business in Europe – and our conviction in the region has only grown over the past 10 years.
We focus on long-term returns, stable and transparent economies and the thematically focused investments I spoke about earlier. Our ability to invest and help grow businesses, create jobs and drive economic returns for our investors and the communities in which we operate gives us an advantage. The pro-business environment in the UK encourages and supports that investment.
We have received support from the Prime Minister, the local Broxbourne Borough Council, and the UK’s Department for Culture, Media and Sport for this project. I am very grateful for their vote of confidence. Further, I am very excited about what I believe we are going to create, boosting the local economy and backing the UK’s creative talent and our partnership across different industries for years to come.