The government-owned London film studio where Oscar-winning director Danny Boyle is planning the Olympic Games’ opening ceremony may struggle to attract tenants after the Games, according to Jones Lang LaSalle Inc. (JLL)
The Three Mills studio complex has limited value in its current form and its inferior location with poor quality buildings for office and industrial use may damp tenant demand, the U.S. property broker said in documents obtained by Bloomberg News through a Freedom of Information Act request.
“Demand for the use of these buildings is likely to be limited in the immediate post-Olympic period,” Chicago-based Jones Lang said in the documents. “Owing to the level of vacancy rates, the poor tenant covenant strength and the remaining term unexpired, an investor will take a dim view on the studio and commercial property.”
The London Development Agency purchased the complex for 23 million pounds ($36 million) in 2004, the year before the city was awarded the Games, according to a budget report. The Legacy Company, which was set up to sell and lease properties built for the Games, acquired the site in October 2010 as part of an agreement to buy Olympic land assets at a 25 percent discount.
It was valued by Jones Lang at 19.95 million pounds as of April 13, 2011, down from 26.75 million pounds in May 2009, according to the documents. Felicity Young, a spokeswoman for the broker, didn’t respond to e-mails seeking comment.
“The site was purchased by the Legacy Company for around 20 million pounds in 2010 and this is the value at which the asset is held on the Legacy Company’s account,” a spokesman said by e-mail. “The 2009 report states that had the site been sold individually, its value would be around 26.75 million pounds.”
‘Isles of Wonder’
Boyle, who’s 2008 movie “Slumdog Millionaire” won eight Academy Awards including best picture and best director, is using the space to rehearse his William Shakespeare-inspired “Isles of Wonder” concept for the opening ceremony of the Games on July 27, he said at a briefing at the studio last month. The site is located near the main Olympic stadiums in East London.
After the Games, the Three Mills complex will continue to be operated as a film and television studio, the Olympic Park Legacy Company said in the e-mail.
The Legacy Company was set up to generate revenue from the Olympic properties as London tries to avoid the experience of previous host cities like Athens that were left with underused or dormant structures. The Games end on Aug. 12 and are followed by the Paralympic Games on Aug. 29.
To contact the reporter on this story: Chris Spillane in London at email@example.com.