John Lewis to focus on core retail business as it scraps affordable homes venture

The John Lewis Partnership (JLP) is withdrawing from its build-to-rent property business due to shifting economic conditions and will instead refocus efforts on its core retail brands.

JLP, which runs the John Lewis department store chain and Waitrose supermarkets, launched its build-to-rent ambitions under previous Chair Dame Sharon White in October 2020 amid challenging retail conditions.

Plans to build 10,000 build-to-rent properties were part of a major diversification strategy that aimed to generate 40% of revenues for the partnership from outside retail by 2030.

In 2022, this seemed to be going well, with the partnership announcing a £500 million deal with investment giant Abrdn. The first 1,000 homes were to be built on the sites of two Waitrose shops in Bromley and West Ealing, both in Greater London. The one-, two- and three-bedroom flats were to be fitted out with John Lewis furniture and rented out to tenants.

Yet, while the applications for these 1,000 homes were successfully completed, and JLP took over the management of four buildings owned by fund manager Abrdn, the venture never saw any houses being built.

JLP blames “higher interest rates, inflationary pressures and a more cautious property market” for its decision to withdraw from the venture and says that the venture “no longer” meets its investment criteria as a result.

It indicated that the latest move is part of a wider strategic decision to now “refocus on the partnership’s core retail brands” under current boss, former Tesco executive Jason Tarry.

Further investment will focus on its retail operations, with the group currently investing around £800 million into John Lewis to improve its experience for shoppers, while a £1 billion investment programme is also taking place at Waitrose.

A JLP spokesman said: “The John Lewis Partnership has today announced its decision to withdraw from its ‘Build to Rent’ property business.

“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."

As John Lewis doubles down on its core retail business, it is taking a leading role in Topshop’s return to the high street, launching the brand in 32 stores and becoming the sole UK bricks-and-mortar retailer for its SS26 footwear line.

Only last week the employee-owned firm further announced it will increase the pay for its shop workers by 6.9%, a move that will see it invest £108 million in staff pay.