Transforming a property portfolio

To increase competitiveness C-level executives continually seek new ways to reduce costs and reshape their real estate portfolios to meet the ever-changing demands of the business. For Remploy, one of the UK's leading providers of employment services, the transformation from manufacturing to a high street service business was a huge change, for which Johnson Controls’ role was pivotal.

Remploy was established in 1945 with a furniture factory in South Wales which employed disabled ex-miners. Over time the factory network grew and employment was provided for disabled people returning from the Second World War. In 2007, during Remploy’s manufacturing peak, they held 83 factories across the UK employing more than 5,000 disabled staff.

However, this was about to change, when Remploy announced that they were to close 43 of these factories changing their business model and strategy significantly with the help of Johnson Controls. The transformation of their business, from directly employing the disabled in their manufacturing plants, to providing recruitment advice on the high street was driven not only by financial loss, but also a shift in attitudes. Bob Warner, Remploy Chief Executive states; “There is now an acceptance that disabled people would prefer to work in mainstream employment.”

Supporting the success of Remploy’s business transformation
Remploy is currently experiencing a huge growth period and intends to have accessible high street branches located in all major UK towns and cities. Johnson Controls Global WorkPlace Solutions (GWS) provide the expert real estate advice to support the success of Remploy’s business transformation.

During the last two years Johnson Controls GWS have located, acquired and fitted out 55 branches including 16 serviced offices.
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These locations, which were acquired and fitted out by Johnson Controls, have allowed Remploy Employment Services to start building a recognizable brand around the UK.

Alongside these acquisitions, Johnson Controls GWS have also disposed of 30 Remploy factory sites from the manufacturing side of the business.

Johnson Controls set up a tailor-made real estate service model for Remploy in order to suit their variable requirements which were driven by political and contract led demands, with several on fairly short timescales. Johnson Controls employed a dedicated team of people to work full-time on the project; one person dealing with the search, site visits and acquisition, the others on the fit outs due to the geographical spread of the locations around the country. Doing the work in-house was more cost-effective and time efficient than employing agents. 

"...work as Remploy’s in-house property expert"
According to Chris Popham, Real Estate Account Director from Johnson Controls, it all comes down to flexibility: “Having this dedicated team is a transparent way to manage costs for Remploy, as the team works on a consultancy basis being paid for their time, rather than on deal completion, giving the client the ability to up or downsize as they see fit. It also means we can respond quickly to Remploy’s request for assistance across the whole country.” Indeed, the focus doesn’t become clouded by profits, fees or transaction commissions, the decisions can be made strategically and without bias, leading to long-term partnerships; Johnson Controls only acts on behalf of tenants and not landlords, so there is no conflict-of-interest and truly impartial decisions are made.

“To make the right property decisions we sit in the client role, focussing on what drives their business. We effectively work as Remploy’s in-house property expert, an extension of their team,” Chris adds.

Remploy has great growth potential in the employee services sector, continuing to work successfully in partnership with Johnson Controls to bid for commercial contracts for government such as the Flexible New Deal (FND) initiative. Last year, Remploy found jobs for more than 10,000 people in the UK. They are currently on track to achieve their target of supporting 20,000 people per year into mainstream employment by 2012/13.

Many disability charities, including Mencap and Mind, backed Remploy’s decision to completely transform their business model, believing that disabled people are more likely to have fulfilling lives working in mainstream employment, in an “inclusive environment”.
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