Known as Project Orange, the confidential operation was ratified by the Sainsbury board last week and is due to be announced to up to 4000 staff any day.
It is understood that Schal beat Heery and a team comprising Mace and US project manager O’Brien Kreitzberg to the massive commission. Schal and the other bidders declined to comment.
The project involves a major rationalisation of Sainsbury’s estate in Blackfriars. The firm is housed in six buildings south of the Thames and urgently needs to move to one site.
Dream project
One industry source said Sainsbury was well-known for occupying a “rabbit warren” of buildings that construction and property executives have been keen to work on for years.
Now Schal will get the chance. It is understood that the Tarmac subsidiary won the project at least six weeks ago, but that all three bidders have been bound by a strict confidentiality clause.
In recent weeks, Schal is understood to have carried out a feasibility study to refine the brief – drawn up by space planner DEGW – that it bid against.
The firm has been appointed to project manage Project Orange. This is expected to translate into a huge construction management commission when it starts on site.
Retailing sources said Sainsbury originally asked bidders to plan for a major relocation of many of the firm’s 4000 Blackfriars-based staff to two sites outside London.
These people would have been moved to administrative support buildings outside the M25, with Guildford and Brighton originally earmarked as the locations.
Schal would have project managed this move as well as construction of the new buildings, but Building understands that most staff are now likely to stay in Blackfriars.
This has cut the value of the project from £250m to £150m, but the creation of a major office complex around Sainsbury’s existing Stamford and Southwark Street sites is still a huge coup.
Within Sainsbury, the project is being led by construction chief Charles Johnston and Ian Coull, the main board director responsible for property.
Southwark planners are expected to be open to the retailer’s offer to upgrade its estate. The area is zoned for employment use, but the council wants to see run-down buildings improved.
No architect has been appointed, but DEGW may design the project itself. Property agent Healy & Baker is also advising Sainsbury.
A spokeswoman for Sainsbury would only say: “We have constant reviews of all the buildings in our portfolio. The whole of Sainsbury is going through a restructuring, but there is nothing specific to say about Blackfriars at the moment.” There is expected to be disruption to Sainsbury staff as they are transferred out of existing buildings before being moved to the new complex.
Project Orange is a bold move for Sainsbury, which, under Johnston, has won a reputation as an efficient procurer of construction. In 1994, the retailer was one of the first major clients to select a list of preferred contractor partners.
Retailing trend
Several other major retailers are rethinking their estates.
There is speculation that Marks & Spencer is planning to outsource its property management and construction departments or transfer its estate to a private facilities manager.
There are also rumours that staff at Asda are planning to buy their in-house facilities management arm.
And last week, Boots The Chemists announced plans to outsource staff from its 360-strong estates division to specialist fit-out architects Lewis & Hickey and Styles & Wood.
