The John Lewis Partnership is axing its ‘build to rent’ property arm to focus more on its John Lewis and Waitrose retail businesses.
The partnership said it was pulling the plug on the property operations due to “a fundamental shift in the economic conditions that underpinned the venture”.
The property pivot was seen as a key strategy of former chair Sharon White’s turnaround plan for JLP. White was succeeded by former Tesco veteran Jason Tarry in September 2024.
JLP said it was currently investing £800m over multiple years to improve its John Lewis shopping experience and £1bn across 320 Waitrose shops.
“The John Lewis Partnership has today announced its decision to withdraw from its ‘build to rent’ property business,” said a JLP spokesperson.
“Our rental property ambition was based on a very different financial environment: one with more stable investment returns, lower borrowing costs and more affordable costs to build homes. Unfortunately, the current climate – higher interest rates, inflationary pressures and a more cautious property market – has meant the model no longer meets the partnership’s investment criteria.
“Since we embarked on the rental property plans in 2020, we have made significant progress with our core retail strategy. This has seen us invest heavily in our customer offer for our unique brands John Lewis and Waitrose, simplifying our business and strengthening our balance sheet.
“The strategy is progressing well and involves modernising our stores, enhancing our digital platforms and improving our supply chain to provide the best possible quality, service and value to our customers. We remain committed land owners in our communities and continue to invest significantly in our property assets and retail offer.
“We’re proud of what we’ve achieved in terms of progress with three planning applications and managing third party BTR homes for residents to a high standard. We will fulfil our existing management contracts at four BTR sites as part of a responsible transition out of the business.”
To date, the build to rent team has progressed three applications for approximately 1,000 homes in Bromley, West Ealing and Reading. The team took on management of four Aberdeen-owned buildings: JLP confirmed it would fulfil its existing management contracts at all four sites as part of its transition out of the business.
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