The John Lewis Partnership is to enter the housing market after agreeing a £500m joint venture with investment manager Abrdn, it was confirmed on Friday.
The department store chain, which also owns Waitrose, said 1,000 rental homes would be built in Greater London and Reading under the multi-decade deal.
The retailer said the shift into housing “aligns with our purpose to make a positive difference for our partners, customers and communities”, as well as providing a “stable” source of income. The build-to-rent residential property market is expected to double, it noted, with 30,000 homes completed annually by 2026, according to data from Savills Research.
Employee-owned John Lewis, which first announced plans to move into housebuilding in the summer, is the first British retailer to use its property portfolio in this way. It wants to build 10,000 homes over the next decade.
Nina Bhatia, executive director for strategy and commercial development, called the deal a “major milestone”, adding: “The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters.”
Neil Slater, head of retail assets at Abrdn, said: “The critical lack of quality rental accommodation in the UK needs to be address, so we are delighted to partner with John Lewis to provide the required institutional investment.”
In Bromley and West Ealing, Waitrose shops will be redeveloped to provide homes and new stores, while a vacant John Lewis warehouse in Reading has been flagged for redevelopment.
The firms remain in talks with local authorities, with planning applications expected to be submitted for the Bromley and West Ealing sites next year. The first public consultation for the Reading site is due in 2023.