The John Lewis Partnership is turning its back on ambitions to be a player in the build-to-rent housing market as it doubles down on its core retail operations.
The Partnership, which owns the John Lewis department stores business and grocer Waitrose, had launched into build-to-rent as it sought to make more of its brand strength by expanding in areas other than retail in 2020, under the leadership of former chair Dame Sharon White.
The retailer said there had been “a fundamental shift in the economic conditions that underpinned the venture” since then. It has subsequently refocused on retail and is investing £1.8bn in John Lewis and Waitrose to bolster their appeal and capabilities.
The Partnership had made progress with schemes for 1,000 homes in Bromley, West Ealing, and Reading. It will fulfil its existing management contracts at affected locations.
A John Lewis Partnership spokesperson said: “The John Lewis Partnership has today announced its decision to withdraw from its build-to-rent property business.
“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.
“Since we embarked on the rental property plans in 2020, we have made significant progress with our core retail strategy. This has seen us invest heavily in our customer offer for our unique brands, John Lewis and Waitrose, simplifying our business and strengthening our balance sheet. The strategy is progressing well and involves modernising our stores, enhancing our digital platforms, and improving our supply chain to provide the best possible quality, service, and value to our customers. We remain committed land owners in our communities and continue to invest significantly in our property assets and retail offer.
“We’re proud of what we’ve achieved in terms of progress with three planning applications and managing third-party build-to-rent homes for residents to a high standard. We will fulfil our existing management contracts at four sites as part of a responsible transition out of the business.”
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