The site is an old airfield north of London, and the new owners of what is becoming known as the Hollywood of Europe are a seemingly unlikely Malaysian company with a background in supermarkets and pharmaceuticals. Possibly the world's largest movie production centre - 116 hectares of studios and back-lot space - are being created at Leavesden north of Watford by Asian entrepreneurial flair and investment, helped by the sort of favourable exchange rates which have made the British film industry boom in recent months. Malaysia has never been known for its film industry, but if what is happening at Leavesden is repeated, that country may soon become a huge base for film production in Southeast Asia. DKH, Datuk Keremat Holdings, plans to invest GBP150 million (HK$1.8 billion) on the site, plus further capital in joint ventures. Its long-term aim is that the technology and skills being developed at Leavesden be used in the development of a new studio complex being considered for a site near Kuala Lumpur. 'We are looking to create a very similar development in Malaysia, to effectively mirror what we are doing in Leavesden,' said company spokesman Mark Pinkstone. DKH can trace its origins to a tin smelting business in Penang in 1889. It acquired a 38-per-cent stake in George Town Holdings, a retail chain, earlier this year just a few months after George Town had acquired Leavesden for GBP42 million. George Town had built its business in Malaysia through the retail sector - supermarkets, department stores and pharmaceuticals. But over the past five years the group's pre-tax profits have stagnated due to the Malaysian retail sector becoming highly competitive. Hence the move into entertainment and leisure. Fifty movies have been made in England this year alone. But the big advantage of Leavesden is that because it was until recently an old Rolls-Royce plant and airfield - the wartime Mosquito fighter was one of its more famous products - the studios are effectively virgin territory for directors moving from analogue to digital shooting techniques. Its huge former aircraft hangars are easily customised. Leavesden Studios' first production was the James Bond movie GoldenEye , released last year. It has also been used for pre-production on 20th Century Fox's Titanic and recently signed up for the production of Mortal Kombat Annihilation. Part of that film will be shot in Thailand, but the company holds it out as an example of the kind of movie which could in future be finished off in Malaysia once a sister site is developed. The big scoop came last month when the firm signed up what will be known as the Star Wars trilogy - prequels to the original Star Warsfilms. Twenty years ago George Lucas foresaw Star Wars as a nine-part series of films. The trilogy will be set 40 years before the events of the first movies. Producer of the trilogy, Rick McCallum, said: 'Leavesden is a naked site in the sense that it hasn't evolved in an analogue world over dozens of years. 'It's totally open space to do what you want. 'I could dig a hole and put a fibre optic line anywhere I want. 'It's a low-tech place to start the highest form of digital film-making.' Co-producer of GoldenEye , Michael Wilson, believes the site is unique. He was able to build five large exterior sets, including the St Petersburg street scenes and film simultaneously on all of them, something that would have been impossible elsewhere. One great advantage is that the area is largely flat - an uninterrupted skyline allows for the recreation of cities or other outdoor sets just as St Petersburg was recreated for GoldenEye. EON productions, which made the film, were so delighted with the set up they have decided to make the next James Bond movie at Leavesden. But the Malaysian company is not satisfied with just creating a film studio - its plans for the site include 300 homes and a studio tour, borrowing on the success of the Universal and MGM theme parks in Florida and aimed at attracting millions of visitors a year. It is expected the Malaysian studios will also feature a cinema history theme park. The company talks about a 'newly built entertainment village of film-related theme attractions, restaurants, clubs, speciality venues and other facilities'. Tours will go through the sets of legendary films of the past - especially James Bond movies - and visitors will be able to view new movies while in production. The Malaysian company has developed close links with the local authority and even plans an unspoilt 'nature area' for local people to enjoy recreated 'countryside'. Ironically these links appear to be stronger than the ones forged by Rolls-Royce. It had plans to redevelop the area, including a golf course. But local residents objected to the scheme, as they have done at several spots in southeast England. As a result Rolls-Royce decided to sell the land. Senior partner at Coopers & Lybrand, Brian McRichie, said: 'Everyone who looked at the Leavesden site saw the possibilities, but some were put off because of the difficulties and obstacles. 'DKH, however, had the imagination to see their way around the problems and maximise the potential and, equally importantly, had the skills to move very quickly.'