The Guardian

John Lewis enters rental home market with £500m Abrdn deal

Mark Sweney

The John Lewis Partnership has struck a £500m deal with the investment firm Abrdn to build 1,000 rental homes, redeveloping three sites already owned by its Waitrose and eponymous retail store chains.

The group intends to redevelop Waitrose shops in Bromley and West Ealing in London and a vacant John Lewis warehouse in Reading, as the first part of a plan to build a total of 10,000 homes over the next decade. The locations for the homes, which will be furnished with John Lewis products, have been chosen because of their close proximity to transport links and central locations.

John Lewis, which reported a firsthalf loss of £99m and warned that a tough run-up to Christmas could put its annual staff bonus at risk this year, said the move into the rental market would provide “a stable income for the partnership”.

Nina Bhatia, its executive director for strategy and commercial development, said: “Our partnership with Abrdn is a major milestone in our ambition to create muchneeded quality residential housing in our communities. Our residents can expect homes furnished by John Lewis with first-rate service and facilities. The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters.”

The retailer said that £500m represented the planned development value of the properties but would not give a breakdown of the level of investment from each partner.

The sites will comprise one- to three-bedroom apartments. The first planning applications for the jointventure are expected to be submitted next year, when a public consultation process on the site in Reading is expected to begin.

If planning permission is granted after the first submission for consent, building work at West Ealing and Bromley will start in 2024, with residents moving in from 2027.

There is no timeline in place for Reading because first proposals for the development of the site are not due to be completed until next year.

“We are continuing to assess other sites which may allow us to bring forward homes sooner,” a spokesperson for John Lewis said.

The company said the build-torent residential property market in the UK is forecast to double in size, with 30,000 new homes completed annually by 2026, according to research by the property firm Savills.

There is estimated to be a shortfall of 75,000 rental properties in London alone.

The announcement of the first developments come as renters face huge increases in costs, with private landlords rapidly increasing rents amid the cost of living crisis.

John Lewis said its joint-venture would include commitments to affordable housing and sustainability goals, tied to its pledge to become a net zero business by 2035.

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2022-12-03T08:00:00.0000000Z

2022-12-03T08:00:00.0000000Z

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