Insignia Richard Ellis (IRE) is to axe up to a quarter of its property management division to improve profitability. The move comes in the wake of restructuring the department after resigning a major account – AXA Sun Life Holdings.
Ted Webster, chairman of IRE’s consulting division, confirmed the company will make up to 20 people redundant out of its 80-strong property management team. It is also likely that IRE will resign further existing accounts.
Webster said: “There’s no question that if we resign accounts there will be some impact on staffing. We want to keep people on until May when we hand over the AXA account, we’ll do out best to limit things but it will affect around 20 people.”
Webster confirmed that the company will hand over the management of AXA’s £800m portfolio because it wants to concentrate on the higher-value end of the market.
He said: “Our relationship with AXA remains a good one and we will be handing over the account next May. The market is in the middle of splitting in two, with big changes and merging companies with large portfolios which are static by nature, and other clients like Brixton Estates, Despa and Slough which are more dynamic. We’re going for the higher value end of the market.”
Steve Smith, property director, at AXA Sun Life said IRE’s decision was expected: “We weren’t surprised Insignia’s been talking about its plans for the future for a while.” Smith confirmed AXA is in negotiations with another firm to take over the management of the portfolio. “We’re in the middle of talks with someone – we’re not inviting tenders.”
The property management team’s head – Peter Matthews – has recently added senior personnel to the department, including Steve Isted and Alison MacDonald who joined from FPDSavills.
New business generated because of the restructuring programme comes from Royal London Asset Management, Portfolio Holdings and Haslemere.
EGi News 30/11/00
