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John Lewis Ditches Housing Dream for Retail Revival
26 Feb
Summary
- John Lewis abandons 10,000-home build-to-rent project.
- Higher interest rates and inflation cited as reasons for exit.
- Focus returns to retail basics with £800m shop investment.
The John Lewis Partnership has officially withdrawn from its significant foray into the build-to-rent housing sector. Originally envisioned by former chairman Sharon White in 2020, the plan aimed to develop 10,000 rental properties. However, current chairman Jason Tarry is redirecting the business towards its core retail operations.
A spokesperson for the employee-owned company explained that the prevailing economic climate, characterized by elevated interest rates, inflationary pressures, and a cautious property market, has rendered the rental property model unviable against the partnership's investment criteria.
The company had secured planning approval for approximately 1,000 homes in Bromley, London, and Reading. These agreements will now be explored for sale to local councils. John Lewis will still fulfill existing contracts to manage around 1,000 purchased flats in cities like London, Leeds, Leicester, and Birmingham.
This strategic shift involves a commitment to revitalizing the John Lewis and Waitrose brands. Plans include an £800 million investment in enhancing John Lewis department stores with features such as 'beauty halls' and cafes. Hopes are also rising for the return of employee bonuses in March, after a three-year absence, reflecting recent progress in reviving the business.
