Texan group TPG concludes purchase of legendary Babelsberg film studios

In a newsworthy real estate deal to kick off 2022, the US investment firm TPG Real Estate Partners (TREP) concluded a deal to take over the majority (75%) of famed German film studio, Studio Babelsberg AG, located in Potsdam in Brandenburg outside Berlin.

TREP had been lining up the deal for Babelsberg for months, and has plans for a big expansion of the facilities. The campus is already the largest studio facility in Germany and one of the biggest studio facilities in Europe.

The historic studio complex has recently hosted several big productions, including The Matrix: Resurrections, Inglourious Basterds, Babylon Berlin, V For Vendetta and Bridge Of Spies.

Studio campuses have been attracting the attention of Wall Street and hedge funds as the streaming content boom led by firms such as Netflix and Amazon Prime gathers pace worldwide.

The deal involves TREP paying shareholders of Studio Babelsberg €4.10 for a majority of the outstanding shares via a recent public offer. Babelsberg top executives, CEO Dr. Carl Woebken and COO Christoph Fisser will continue to hold a minority stake in the studio complex, which will continue to operate as an independent entity, while "benefiting from the resources and networks provided by the global platform," said the company.

Woebken and Fisser had originally taken over the studio complex from French group Vivendi in 2004 for a symbolic €1, and as REFIRE understands it, have chosen to hold on to a minority stake despite offers from interested funds to buy them out completely.

With the closing of the deal, Studio Babelsberg, founded in 1911, will become part of Cinespace Studios, and follows on the heels of TREP's recent purchases of other studio campuses in Toronto and Chicago, belonging to Cinespace, the studio platform which now encompasses a stable of 90 soundstages worldwide, and is the second largest operator in North America.

According to TREP Partner Michael Abel in a statement, “Across the globe, Studio Babelsberg is known for its quality and as a symbol of Berlin’s and Brandenburg’s creative culture. With Studio Babelsberg, we saw an opportunity to invest behind a leading studio facility that is well positioned to benefit from secular growth trends in media and content consumption. We support the company’s strategy and direction and look forward to growing the business.”

Studio Babelsberg does indeed have an illustrious history of different owners in its 110-year history, including Ufa, Defa, Treuhand, Vivendi and Babelsberg AG. 

Since privatisation after re-unification thirty years ago the actual studio complex has ceased to be the centralised employer it was then, with 3,000 employees in the old East Germany. Now it barely employs 100 staff, with all other function outsourced to third parties

Studio Babelsberg has nonetheless highly developed LED film technology integrated throughout, which is strongly in demand in film production. It also owns and controls valuable land and property assest which could produce alternative yields if the returns on film production proved too low, although the nature of the business might preclude certain asset sales, with many of the buildings enjoying protected status. The complex also directly neighbours onto the controversial Media Park skyscraper being developed by star architect Daniel Liebeskind, which should ensure a certain future prominence.

Minority shareholders Woebken and Fisser had originally promoted the vision of Babelsberg as a home for German and European film production under the supervision of famous directors Volker Schlöndorff and Peter Fleischmann, but despite the injection of countless subsidies at state, federal and film board promotion level, it never really happened.

While the Texan-based alternative investors TREP's interests include real estate, they also encompass diverse interests such as amusement parks, sports stadiums, cinemas and other entertainment venues. TREP also owns Creative Artists Agency (CAA) which represents leading actors and even film producers worldwide. This is also seen as part of the synergies which TREP is hoping to gain access to with the purchase of Studio Babelsberg.