John Lewis Partnership (JLP) has announced that it will proceed with its property-to-rent scheme, despite facing criticism. The retailer plans to utilize its unused land to provide much-needed housing. This decision comes as the chairman, Sharon White, who introduced the plan, is set to step down. However, JLP maintains that it remains dedicated to the project, regardless of leadership changes.

Nina Bhatia, JLP’s executive director for strategy and commercial development, discussed the initiative in an interview with the Daily Telegraph. She emphasized that the company owns valuable property that can be used for developing high-quality housing, especially in areas with brownfield sites. Bhatia stated that by renting out these homes, particularly to the “squeezed middle,” JLP can offer a long-term rental option, including affordable housing. The company aims to focus on responsibly managing these homes instead of selling them off.

While the UK is in urgent need of new housing, the plan has received criticism for diverting JLP’s attention away from retail. Both the John Lewis and Waitrose chains have underperformed, raising questions about investing in housing. Bhatia did not provide specific details about the number of properties to be built or the development timeline. However, she mentioned that the initial construction sites are in London, where a significant portion of the population rents.

JLP believes that rental housing can contribute to improving local communities by creating jobs and developing communal spaces. Additionally, residents in these areas would have access to a new Waitrose shop, as every Waitrose store is also a John Lewis department store click & collect location.

The Build to Rent initiative is being partnered with investment giant Abrdn, which has committed £500 million for the construction of 1,000 homes. JLP hopes that this project will account for 40% of the group’s profits by 2030.

Despite posting half-year losses in July, JLP has managed to narrow them. Pre-tax losses, excluding exceptional items, improved by 14% to £57.3 million. Overall pre-tax losses also narrowed by 41% to £59 million. Sales for the half-year period exceeded £5.8 billion, representing a 2% year-on-year increase. Despite these losses, JLP remains dedicated to its housing plan and aims to continue meeting the housing needs of local communities.

Useful links:
JLP Property-to-Rent Scheme
Abrdn Investment Giant