Should your production company continue leasing or consider owning its office? Compare occupancy costs, property value, financing, business flexibility and the long-term implications before committing capital to a Film City production office.
Lease economics
02Ownership valuation
03Commercial finance
The right choice depends on the property’s actual value, your lease terms, the cost of capital, expected occupancy period and the flexibility your production business needs.
Leasing may preserve working capital and make it easier to change premises as staffing, production requirements or business needs evolve.
Ownership may provide greater control over the premises and a continuing asset, but it also ties up capital and creates financing and property-related obligations.
Illustrative figures can help frame the discussion, but they are not verified current Film City market rates. Replace them with actual quotations, lease documents and comparable property evidence.
Use the actual contracted rent and add applicable maintenance, security and other occupancy charges.
Treat this as a scenario to test, not a confirmed market range. Establish value from relevant evidence.
Test alternative yields using comparable rents, vacancy, operating expenses and the purchase price.
Annual ownership cost = financing cost + opportunity cost of equity + maintenance and ownership expenses.
Compare this with annual lease cost, including escalation, maintenance and other contractual charges. Consider tax and accounting treatment separately with your financial adviser.
Ownership may reduce dependence on lease renewal, subject to title, tenure, transfer conditions and applicable property rules.
Evaluate whether ownership allows the acoustic treatment, editing rooms, equipment storage and production layout your business requires.
A purchase can tie up funds that might otherwise support production, payroll, equipment or business expansion.
Resale value is not guaranteed. Review market evidence, property rights, demand and potential exit costs before relying on future appreciation.
If you plan to finance a production office purchase, obtain lender-specific eligibility and valuation requirements before finalising the transaction. Lenders may assess property rights, marketability, permitted use, borrower finances and the available security.
A property valuation can provide an independent assessment of the property’s value as of a specified date and for a defined purpose. It can help you examine the seller’s asking price and prepare supporting information for a financing discussion.
The valuation scope, methodology and report format depend on the assignment and the intended recipient. Confirm that the professional’s registration and category meet the applicable requirements.