John Lewis axes ill-fated build-to-rent housing plan to refocus on retailers and supermarkets

John Lewis has abandoned an ill-fated foray into build-to-rent housing to refocus on shopkeeping.

The partnership, which runs the John Lewis department store chain and Waitrose supermarkets, was aiming to build 10,000 rental properties under a blueprint launched by previous chairman Sharon White in 2020.

But the plans have been ditched as current chairman Jason Tarry – the former boss of Tesco in the UK – concentrates the business on retail basics.

‘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,’ a spokesman for the employee-owned business said.

‘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.’

Meanwhile, the business has ‘made significant progress’ in reviving John Lewis and Waitrose, the spokesman said.

Back to basics: The John Lewis Partnership has abandoned plans to build 10,000 rental properties under a blueprint launched by previous chairman Dame Sharon White in 2020

There are even hopes that its staff could see the desperately awaited return of a bonus at its annual results in March, after three years without it.

In 2020, White outlined plans to make 40 per cent of group annual profits from outside retail. 

The idea was to build 10,000 rental homes, including around 7,000 on sites within its property estate.

It received a green light for three planning applications for around 1,000 homes in Bromley, in Kent, London and Reading. But it will now explore options with the local councils to sell these agreements.

John Lewis will fulfil its contracts to manage around 1,000 flats it bought from Aberdeen, including buildings in London, Leeds, Leicester and Birmingham – some of which last up until late next year.

The overhaul will result in a small number of job losses, the business confirmed. 

Tarry, who spent six years as chief executive of the UK and Irish arm of Tesco, pledged there would be ‘a sharp focus on being brilliant retailers for customers and investing in growth’ when he took over in September 2024.

Proposals to pump cash into shops include an £800million investment in opening ‘beauty halls’ and cafes in John Lewis department stores.