John Lewis Partnership (JLP) has announced it is withdrawing from its build-to-rent (BTR) property business.
The company cited a fundamental shift in the economic conditions that underpinned the venture when it launched in 2020.
In 2022, JLP agreed a £500m BTR joint venture with Aberdeen to deliver more than 1,000 homes across three initial sites in West Ealing, Bromley and Reading (pictured).
The JLP BTR team, which was led by Katherine Russell, also took on the management of four Aberdeen-owned buildings in Leeds, Leicester, Birmingham and Stratford, which were previously managed by JLL.
JLP will continue to fulfil its existing management contracts at all four sites as part of its transition out of the business.
A John Lewis Partnership 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. 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.
“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 and involves modernising our stores, enhancing our digital platforms and improving our supply chain to provide the best possible quality, service and value to our customers. We remain committed land owners in our communities and continue to invest significantly in our property assets and retail offer.
“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.”
