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John Lewis Partnership (JLP) has announced its intention to withdraw from its build-to-rent property business, citing a shift in economic conditions since the venture launched in 2020.
The decision follows a review to refocus on the core retail brands, John Lewis and Waitrose.
The scheme was a strategic venture to develop and operate high-quality, purpose-built rental homes, primarily on land already owned by the company (such as above Waitrose supermarkets or in car parks).
According to JLP, its property team had progressed three planning applications for approximately 1,000 homes in Bromley, West Ealing and Reading, which were approved despite a constrained planning environment.
A national operating platform was scaled to around 1,000 homes over two years. The partnership took on the management of four buildings owned by the city of Aberdeen.
The company confirmed it will fulfil existing management contracts at all four sites as part of a transition out of the residential property business.
In spite of this, the group has earmarked £800m to upgrade John Lewis stores over several years and has facilitated the return of Topshop and Topman to physical retail sites.
Meanwhile, Waitrose is also deploying a £1bn investment programme across approximately 320 shops. The partnership aims to modernise stores, enhance digital platforms and improve the supply chain.
A spokesperson said: “The John Lewis Partnership has today announced its decision to withdraw from its build-to-rent property business. 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.
“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…We remain committed to land owners in our communities and continue to invest significantly in our property assets and retail offer.”
They added: “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.”
