The John Lewis Partnership has revealed the first three locations in Britain where the retailer plans to debut its new rental properties.
The three proposed sites include buildings over Waitrose shops in Bromley and West Ealing in Greater London, as well as replacing a vacant John Lewis warehouse in Mill Lane, Reading.
The department store chain said local people in Bromley and West Ealing will be invited to several rounds of public consultation over the coming months to discuss the proposed redevelopment of the Waitrose stores.
Home heaven? The John Lewis Partnership has unveiled the first three locations for its ‘built-to-rent’ homes plan
Waitrose stores in Bromley and West Ealing would also be ‘significantly improved as part of the proposals’, according to the group.
The John Lewis Partnership confirmed that detailed designs will not be shown until later in the year ‘to give residents the opportunity to shape the plans at this early stage’.
It added: ‘Subject to the feedback received during these consultations, our intention would be to submit planning applications for Bromley and West Ealing next year. A period of public consultation for Mill Lane, Reading, will take place later this year.’
Nina Bhatia, executive director for strategy and commercial development at the John Lewis Partnership, said: ‘Everything people love about our brand – quality, trust and service – we want to bring to the experience of renting a home with us.
Your new home? The John Lewis Partnership plans to build above this Waitrose store in West Bromley
‘Our role as developer and operator, as well as an already established local business and employer, signals our ambition to bring long-term value to each of these communities.
‘Helping to create homes has always been at the heart of what we do and we now have a unique opportunity to use our expertise and skills in new ways to deliver much-needed new housing.’
The partnership’s 80,000-strong workforce, could, it has been reported, be offered discounted rents.
According to the retailer, the proposed developments will form part of the UK’s growing ‘built-to-rent’ property market.
The group wants to boost standards in the rental market, both via its role as a developer and when managing the buildings as a business.
It said the proposed homes and developments would ‘offer the trust, quality and service that people expect from John Lewis.’
It added: ‘The homes would be built for different sized households and designed to our high standards.
‘Residents would have options for short and long-term tenure and to have the homes furnished by John Lewis. Creating a sense of community through incorporating shared spaces and facilities such as roof gardens and fitness studios and exploring how schemes can play a role in the wider community would be integral to our approach.’
No ground rents will apply as all the homes will be rental properties, a spokesperson for the John Lewis Partnership told This is Money.
As it branches out further from retail in a bid to shore up its finances, the John Lewis Partnership plans to deliver 10,000 rental properties across the UK in the next decade. The group wants 40 per cent of its profits to come from outside of retail by 2030.
The John Lewis Partnership already owns most of Leckford, a village in Hampshire, where every home with a green door is a partnership property.
What is ‘build-to-rent’ and how does it work?
The John Lewis Partnership is planning on developing homes via the ‘build-to-rent’ model. This means the properties will be rented out rather than sold.
They are common in other countries, particularly in Germany, France and the US.
In most instances, schemes like this typically offer longer tenancy terms and are managed by the owner or operator of the overall site.
With property prices surging, some believe there is great demand for high-quality rental alternatives. It is thought that build-to-rent may one day fill the void in available rental properties that has been left by landlords quitting the sector following a raft of regulatory and tax changes they have endured.
For businesses like the John Lewis Partnership, the regular rental income coming through is a major perk of ‘build-to-rent’, as it the mounting value of the bricks-and-mortar asset, or property, itself.
For prospective tenants, some may find the idea of a single corporate landlord and decent nearby amenities appealing, though tenants should be aware of all potential costs, charges and fees involved before taking the plunge and opting for a tenancy in a built-to-rent home.
The John Lewis Partnership has been no stranger to its fair share of financial woes and turbulence over the last few years, and is on a mission to ramp up its profits and revenue via other channels.
In March, the John Lewis Partnership said that its 78,000 staff would share a £46million bonus pot, equivalent to 3 per cent of wages for every worker.
The department store scrapped its bonus scheme during the pandemic for the first time since 1953 as shops were closed and the chain lost millions. John Lewis suffered its first annual loss, of £571million, in 2020.
But, in its last financial year, the group’s underlying profits climbed above the crucial £150million level set as the target for the return of bonuses.
Ambition: The John Lewis Partnership wants to build 10,000 rental properties over the next decade
The retailer shut eight department stores during the pandemic and has reduced the number of workers by around 2,000, including head office jobs.
The John Lewis department store chain achieved its highest ever sales of £4.93billion in the year to January 29, up 8 per cent like-for-like on last year. Sales at Waitrose hit £7.54 billion, up 1 per cent on a year ago.
The chain’s latest annual profit before exceptional items rebounded to £181million, up 38 per cent. Overall losses before tax fell to £26million, which is £491million better than the previous year.
The group is now swapping its ‘Never Knowingly Undersold’ motto for a ‘Quality and Value’ pledge, to be applied both in-stores and online.
But, with inflation surging and millions of households up and down the UK feeling the squeeze financially, 2022 looks set to be another tough retailers, and it remains to be seen how the John Lewis’ core arm will shape up for the rest of the year.
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