John Lewis ditches £500m build-to-rent project
The John Lewis Partnership (JLP) has scrapped its plans to build a £500m build-to-rent (BTR) portfolio, with the group looking to refocus on its core retail business.
The employee-owned retail group cited a “fundamental shift” in market conditions since the project was launched in 2020.
JLP had initially identified 20 John Lewis and Waitrose stores as having potential for housing, and in 2022, the group formed a £500m partnership with Aberdeen to deliver around 1,000 new homes. Only last year, JLP was given the green light to redevelop its Waitrose store in West Ealing and build hundreds of new homes nearby.
A spokesperson for JLP said that the group’s ambitions in the rental market were based on a financial environment with more stable investment returns, lower borrowing costs, and more affordable costs to build homes.
They added: “Unfortunately, the current climate – higher interest rates, inflationary pressures and a more cautious property market – has meant the model no longer meets the Partnership’s investment criteria.
“We’re proud of what we’ve achieved in terms of progress with three planning applications and managing third party BTR homes for residents to a high standard.”
JLP said it would fulfil existing contracts to manage homes at four sites owned by other parties which are linked to Aberdeen, located in Birmingham, Leeds, Leicester and Stratford, which would come to an end this year and the next.
The group will now look to refocus on its core retail brands – department store chain John Lewis and supermarket retailer Waitrose – with an investment strategy that looks to focus on modernising its store estate, enhancing digital platforms, and improving supply chains.