Why the movie industry is a hot ticket for real estate investors

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Incentives continue to play a role, tax breaks attract production to new locations. After two decades in New Zealand, production of the Lord of the Rings series recently moved to the UK, where demand for film and television studios is higher than ever, according to JLL.

Costa Rica strives to lure film production with incentives. The country’s legislative assembly is discussing the initiative to boost the economy this year.

“In addition to the staffing of the crew, access to talent and logistics, incentives through tax breaks and subsidies are an important factor for film companies when choosing a location,” says Michael Davis, studio manager of JLL in the UK and Europe. “This is not only the case from country to country, but equally from region to region and from state to state.”

For example Netflix decided to take advantage of it of a total of $ 14.5 million in funds from both the state of New Mexico and the city of Albuquerque for the purchase of ABQ Studios in 2018. At the same time, productions in the state are eligible for credit under the New Mexico Film Tax Credit Program of up to 30 percent.

While many investors in the industry are already familiar with big movie companies and have stakes in big movie companies through stocks or bonds, investing in a sector that requires a hands-on approach is “not for everyone,” says Davis.

“It’s a fast-paced, complex sector – and that requires a deep understanding of the various needs and requirements of film companies,” says Davis. “Nevertheless, more asset management and operating platforms with the know-how for capital partnership will certainly emerge if investors continue to move into alternative real estate sectors.”