It’s been known for over a year that John Lewis wishes to diversify into the private rental sector and now it has revealed details of three new Build To Rent schemes.
The firm has agreed a £500m multi-decade joint venture with global investment company abrdn to deliver around 1,000 new homes in the three locations.
The deal marks a milestone in the company’s plans to use its significant property assets to build residential homes and diversify its business. The joint venture will help the retailer to reach 10 percent of its ambition to build 10,000 new homes over the next decade.
John Lewis says the joint venture brings together abrdn’s experience as one of Europe’s largest residential investment managers together with “the trust, service and quality synonymous with the John Lewis and Waitrose brands.”
The deal will see the Partnership develop and manage the proposed new sites and includes commitments to affordable housing and sustainability tied to its existing 2035 Net Zero pledge.
A statement from the firm says: “We want to create homes that will provide a stable income for the Partnership, and moving into housing aligns with our purpose to make a positive difference for our Partners, customers and communities.”
In Bromley and West Ealing in Greater London, subject to planning permission, Waitrose shops will be redeveloped to provide new homes and improved stores. In Reading, a vacant John Lewis warehouse will be redeveloped. The sites were chosen according to their central location and proximity to transport links.
John Lewis says the Build To Rent residential property market is estimated to double with 30,000 BTR homes completed annually by 2026.
Nina Bhatia, executive director for strategy and commercial development at the John Lewis Partnership, says: “Our partnership with abrdn is a major milestone in our ambition to create much-needed quality residential housing in our communities. Our residents can expect homes furnished by John Lewis with first-rate service and facilities. The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters."
And Neil Slater, head of real assets, abrdn, adds: “The critical lack of quality rental accommodation in the UK needs to be addressed, so we are delighted to partner with the John Lewis Partnership to provide the required institutional investment. The ambitions and responsible ethos of our brands both strongly align, and our partnership should offer investors long-term returns and give residents confidence in a top-quality living experience.”
John Lewis says it continues to work with the local authorities and communities to evolve plans and expects to announce more details for West Ealing and Bromley in due course, before aiming to submit its first planning applications next year. A first public consultation for the site in Reading is expected in 2023.
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As we exit, they will fill the void… god help the tenants as their rents will rocket.
That’s ok. That will cover last weeks new boat arrivals.
Best of luck to them. Seems there is always need for accommodation in London and if this helps to fill a very big gap then well and good.
So will these properties be available to all, or will they be very selective of tenants ? It'll be interesting to see how they deal with the tenants from hell when they get them. Good luck to them I have no problems with it at all doubt they are going to affect me .
They will not take the ‘ challenging’ tenants that is for sure, back to the council for them.
Their ceo has zero retail experience and it shows
Waitrose and John Lewis are mere shadows of their former selves
Build to rent often seems to be luxury apartments with communal space and gyms. Which is fine but they don't come cheap and would not suit a large percentage of renters. Replacing small LL with large build to rent will not solve the housing problem.
They mention affordable housing. I wonder how much their affordable housing is. Bet families on low income can't afford it.
John, I'd love to know what '' affordable'' is, affordable to who ?
Affordable housing is defined at housing offered at 80% of the 'normal' price. But this definition is like a colander, full of holes, all the builder has to do is market the 'normal' properties at 20% higher than they expect to be able to sell them for. It's the marketting price, rather than the selling price, that can be inflated.
Hotels do the same. My daughter booked a hotel for her wedding, and paid around £5K. The wedding didn't proceed, she cancelled in good time, and the hotel gave her a £5K of vouchers. But if she had wanted to use the vouchers, the room price would be the displayed rate, £300 per nite, rather than £100 as it was offered on the internet.
I welcome BTR ghettos as I think they'll have the same effect as the purpose-built student ghettos have had - softening up tenants to what real world competitive rents actually are for premium properties.
Since these corporates also have the ear of government then they'll be much more effective in getting the message across about the need for fixed term tenancies and relatively fast, simple and cheap methods of getting rid of anti-social tenants and rent dodgers.
Robert, l believe you are correct. However they want small landlords out of the market and that's what will happen
This has all the ingredients for another sub prime type crisis. Sub prime crisis occured becaus people took on mortgages who were bad payers. They then defaulted, left the properties which were looted leaving a massive liability. Detroit is a good example and no doubt you could point out council estates in Britain wrecked by the tenants.
Edwin
I don't think their attempts to control market forces in the PRS will be any more successful than their abysmal efforts in the Energy market where market forces have prevailed, although every energy bill payer is paying a fortune for such failure along with the ECO surcharges.
Having seen the "future" for English landlords play out in the People's Republic of Scotland, I don't share your pessimism, but then I no longer rent to families who would want to stay long term and could then benefit from an indefinite rent freeze and eviction ban.
I now only rent to groups of students with multiple solvent guarantors who won't want to stay long term, giving me the option to charge market rents on every new tenancy.
It's a sad irony that the SNP dogma, which they will claim is to "protect" tenants, has now made the nuclear family a much less desirable option than a group of students for many Scottish landlords!
Robert l see sturgeon as a communist, so wrecking everything is their policy. Communists have never bothered about destroying the family model. Further higher energy costs meet the green and net zero policy.
I reckon they will be let under a different type of tenancy agreement (not available to us) Would make the investment blue chip
They would very likely try that one Jahan, but if that new kind of tenancy was not available to us then we must band together and fight it
They would state something like must have a Ltd company with min 25 units all in the same postcode to qualify oh and must have an ex MP on their board
The student ghettos in Scotland can have fixed term rental contracts which are outlawed for the rest of us, so it's entirely possible that the BTR ghettos will get special treatment but they will still drive up rents for better quality conventional properties which is what I have found with the student ghettos so far in Scotland.
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