John Lewis has signed a £500m deal with investment giant Abrdn to enter the rental property market.
The agreement announced today will see the High Street titan deliver a thousands new homes a year, with a view to having built 10,000 in the next decade.
In a bid to diversify and move away from dependency on the retail sector, the properties in three locations will include one-, two- and three-bedroom flats.
John Lewis announced its intention to enter the rental property market in June at developments in Bromley and West Ealing in London, as well as a vacant John Lewis warehouse in Reading.
The properties will be fitted with John Lewis furniture and rented out, and are part of the chain’s bid to build up its portfolio.
In Bromley and West Ealing in Greater London, subject to planning permission, Waitrose shops will be redeveloped to provide new homes and improved stores. In Reading, a vacant John Lewis warehouse will be redeveloped. The sites were chosen according to their central location and proximity to transport links.
This comes as the house prices fell 1.4 per cent last month according to Nationwide, while the ONS released figures this week showing rents are up by almost a third since 2019. It added that some are suing an increase of 60 per cent, as a shortage of quality accommodation and increased demand, squeezes people out.
Millions are also facing pressures on their bills and rent due to the cost of living crisis.
Nina Bhatia, executive director for strategy and commercial development at the John Lewis Partnership, as saying: “Our partnership with abrdn is a major milestone in our ambition to create much-needed quality residential housing in our communities.
“Our residents can expect homes furnished by John Lewis with first-rate service and facilities. The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters.”
Neil Slater, Head of Real Assets, abrdn, said: “The critical lack of quality rental accommodation in the UK needs to be addressed, so we are delighted to partner with the John Lewis Partnership to provide the required institutional investment. The ambitions and responsible ethos of our brands both strongly align, and our partnership should offer investors long-term returns and give residents confidence in a top-quality living experience.”