John Lewis Partnership (JLP) is steadfast in its pursuit of a long-term property-to-rent initiative, aimed at leveraging its brownfield sites to address the pressing need for housing. This commitment remains unwavering, even as Chairman Sharon White, the driving force behind the plan, prepares to conclude her five-year term. JLP asserts that its dedication to this new venture remains firm, regardless of changes in leadership.
Nina Bhatia, JLP’s Executive Director for Strategy and Commercial Development, articulated the rationale for the housing plan in an interview with the Daily Telegraph. She highlighted that JLP possesses a substantial and valuable property estate, offering the potential for repurposing these assets to develop high-quality housing, particularly in areas with well-located brownfield sites. Bhatia emphasized, «Our estate provides us with a unique opportunity to unlock brownfield land for housing, catering to the needs of local communities. Through renting this housing, particularly to the ‘squeezed middle,’ we aim to offer a high-quality, long-term rental solution, including affordable housing.»
Importantly, this initiative entails the creation of «responsibly managed homes for the long term, with no intention of divestment,» as noted by Bhatia.
Despite criticism that the plan diverts JLP’s focus from its retail business, especially during a period of underperformance in its John Lewis and Waitrose chains, the company remains committed to addressing the UK’s housing needs.
While specific figures regarding the number of properties to be built and the timeline were not provided, Bhatia mentioned that initial development sites are located in London, a city where a third of the population now opts for renting.
JLP envisions its rental housing project as a means to «enhance local communities.» It anticipates that this initiative will create employment opportunities, establish communal spaces, and provide local residents with the convenience of a new Waitrose store.
Furthermore, each Waitrose store also functions as a John Lewis department store click & collect location, bolstering the synergy between the two brands.
The Build to Rent initiative is being undertaken in partnership with investment giant Abrdn, which is injecting £500 million into the project with the goal of creating 1,000 homes. JLP aspires to see this initiative contribute to 40% of the group’s profits by 2030.
JLP’s most recent half-year figures, encompassing the period up to July, indicated that the company is still grappling with losses, although these losses have narrowed in the latest reporting period. JLP acknowledges that its turnaround strategy may take longer than initially projected, primarily due to inflation.
Losses before tax and exceptional items decreased by 14%, from £66.8 million to £57.3 million, while losses before tax showed a significant 41% reduction, from £99.2 million to £59 million. Sales for the first half of the year exceeded £5.8 billion, marking a 2% year-on-year increase.
