John Lewis is considering plans to build 10,000 homes over the next decade as the high street store group looks to revive its flagging fortunes by becoming a landlord.
The employee-owned group, which comprises the upmarket John Lewis department stores and the Waitrose supermarkets, is understood to have identified enough excess space on the land it owns to build at least 7,000 homes.
The properties, which will range from studio flats to four-bedroom houses, will be built on sites owned by the chain, above Waitrose supermarkets or on land next to the company’s distribution centres.
Tenants of a John Lewis-owned home will have the option of renting the property fully furnished with the department store’s products or using their own. Some of its housing developments are expected to come with a concierge service, and many are expected to include a Waitrose convenience store as part of the development.
The first John Lewis homes are planned for south-east England but the partnership believes there are opportunities across the country, given the extent of the nationwide housing crisis as property prices spiral upwards, pushing properties out of reach of first-time buyers. If successful, it would be expanded to include further sites. John Lewis’s 80,000 staff, who are partners in the business, could be offered discounted rents.
It is not the chain’s first foray into the housing market. John Lewis also owns most of Leckford, a village in Hampshire, where every home with a green door is a partnership property. The retailer is preparing to lodge a handful of planning applications early next year.
The move is part of the store’s plan to restore its fortunes. John Lewis has had a very difficult time in recent years amid pressure on the high street from its online rivals, and tumbled to its first annual loss in 2020 because of the Covid-19 pandemic. The big shopping changes caused by the crisis prompted it to close 16 of its 50 stores and commit to spending £800m to overhaul the remaining branches, as well as improve its website and shopping app.
The fallout from the pandemic meant staff did not get a bonus for the first time since 1953, with one also unlikely this year. The store group has been under attack in every market in which it operates. A big decline in its previously fabled customer service ratings has not helped matters.
“Typically, a developer might try and maximise returns and then move on to the next one,” Chris Harris, the partnership’s property director, told the Sunday Times. “We are not trying to do that. We are aiming to charge a fair rent and to stay for the long haul.”
John Lewis’s plans form part of the burgeoning “build to rent” sector, in which developers aim to offer tenants a greater degree of security and more visibility on any increases to their rent.