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John Lewis has trouble in store over Build To Rent scheme

The John Lewis Partnership is said to be facing “extreme challenges” as a result of its bid to enter the private rental market.

As recently as July it announced that it had submitted planning applications for two Build To Rent sites at West Ealing and Bromley in London. Initial plans for a vacant warehouse site in Reading were to be brought forward later this year.  

This followed its announcement in December last year of a £500m multi-decade joint venture with global investment company Abrdn to deliver around 1,000 new homes across the three locations. However the Daily Telegraph now reports that plans to construct over 400 flats above a West Ealing Waitrose could cost the company far more than its worth on paper.

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Planning documents have revealed the development could result in a negative return of £57m for the business.

Property consultant Quod, which carried out the early analysis, is quoted as claiming the “financial viability of the scheme is extremely challenging”.

Current predictions reveal that John Lewis’ scheme would be worth just £183m based on present-day values, but cost roughly £240m to carry out, the Telegraph reports.

n June this year Chris Harris, seen as the architect of the move by the John Lewis Partnership into rental housing, announced he was stepping down this autumn. 

He had been property director of the firm for five years and was instrumental in setting up the partnership’s attempt to become a major Build To Rent player, as part of its bid to diversify.

Also in June the John Lewis Partnership wrote down the value of its head office by some £15.6m, due to the continuation of working from home and a widespread drop in commercial property values. 

The company has closed seven floors of the building.

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  • George Dawes

    Ever since the ceo with zero retail experience took over jlp has steadily gone downhill

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    I think you mean Sharon White? The Chairwoman? She’s ex civil service… 🤦🏻

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    Ex civil service, well that explains a lot

     
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    She's a director of Barratt too. What she knows about anything I don't know.

     
    Richard LeFrak

    She is on a mission to take them to the edge of skint.. but will not be fired though will she.

     
  • John  Adams

    Theres a reason why the big players are Housing Associations and not Private Corporates in the sector and that's the tax breaks they get as quasi-charities.
    When JLP have to deal with dodgy tenants and damp they'll wonder why they gave up selling Socks and Saucepans.

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    So maybe BTR is not the saviour of the PRS.

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    And who would have thought that 😂🆘🤷‍♂️

     
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    This does not surprise me in the least. There are a very large number of people in top jobs who do not undertand the private rental sector. They haven't foreseen the problems which will result from the loss of Section 21 either and the rest of the new RENTERS REFORM LEGISLATION.

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    My heart bleeds for them... 💔 😂

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    Ex Civil Service, that explains a lot.

    Who in their right mind would give any ex Civil Servant a top job, it defies belief.

    The whole board of JLP must be crazy.

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    BTR certainly not the saviour of PRS because its not PRS its Corporate letting in disguise, another fad like useless Shared Owner’s that they are roping misfortunate young into.
    Clearly Corporate Companies Offices are in trouble, internet casualty and surplus to requirements which is the reason they are switching and want our Business so they want us out we are just collateral damage.
    The only good point about BTR is we nearly have full employment except for the one that don’t ever want to work anyway.
    The Government knows this and must keep the Economy going, problems will come later when the Building is done the economy is sure to hit the buffers, when the Concrete Mixer stops

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    You always show brilliant foresight Michael, which is why you should be running the Housing Department in this country.

     
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    • A JR
    • 07 September 2023 08:35 AM

    I have long held doubts about corporate viability in the residential rental sector, there’s simply not sufficient profitability to sustain a system that relies on multi tiered administration to navigate the mass of practical issues on a daily and ongoing basis.
    Private LLs manage (or did!) these demands because they are committed to what they own, make direct and effective decisions and give much of their time free to ensure their ongoing personal success .

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    Summed up perfectly there AJR

     
  • Richard LeFrak

    So JLP cannot get this going and the so called genius behind it is making tracks.... The clueless idiot at M&S has also fallen foul of planning and complaining about it.

    Listen, stick to comfy underwear and pre packed sandwiches and leave renting to people that have lived it, Gove should pay attention to this nonsense.

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    Just shows that all these well advised People who think they know better with their dangerous legislation, really have so little knowledge, they can't even build to cost let alone run a financially risky portfolio of rental properties

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