John Lewis Partnership Withdraws From Rental Venture

The John Lewis Partnership has confirmed it has exited its controversial build-to-rent housing venture, first announced in December 2022.  

The £500 million joint venture with global investment company Aberdeen was established to create 10,000 rental homes over several decades. The deal marked a milestone in the Partnership’s plans to use its significant property assets to build much-needed residential homes and diversify its business under then-Chair Baroness Sharon White. The Partnership stated that moving into the rental homes market was part of its long-term plan for 40% of profits to come from outside of retail by 2030, a plan which has since been dropped. Current Chair, Jason Tarry, who succeeded Baroness White in 2024, is shifting the Partnership's focus back to retail, investing heavily in the John Lewis brand and Waitrose stores. 

Planning permission was initially sought - and awarded - for the redevelopment of two Waitrose stores in Bromley and West Ealing in Greater London, followed by a site in Reading which had previously housed a John Lewis distribution centre. The sites were chosen according to their central location and proximity to transport links, and would have delivered the first 1,000 of the planned 10,000 homes to be developed and managed by the John Lewis Partnership.

The West Ealing and Bromley plans were for 428 flats across four high-rise blocks and 353 flats in a single 24-storey block respectively, both above the existing Waitrose stores. The Reading site would have resulted in 170 flats. While planning permission had eventually been granted at all three locations, construction had not yet begun, and the Partnership is now understood to be in discussion with local government before committing to the future of each site.

As part of the JV, the Partnership currently manages four buildings owned by clients of Aberdeen Investments, comprising of 326 homes in the Clarendon Quarter in Leeds, 232 homes in the Queen Street Quarter in Leicester, 259 homes in Landrow Place in Birmingham and 158 in Stratford Studios, East London.

A John Lewis Partnership spokesperson said: “Our rental property ambition was based on a very different financial environment: one with more stable investment returns, lower borrowing costs and more affordable costs to build homes. 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.”

A spokesperson for Aberdeen said: “John Lewis Partnership are contracted to keep managing our UK build-to-rent properties until 2027, and we are strongly committed to ensuring that they maintain the high standards customers have come to expect as we work with them on an orderly handover.” 

Source : Insight DIY 

Image : Render of proposed West Ealing properties - (C)John Lewis Partnership

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