The John Lewis Partnership is seeking development and investment partners for its debut build-to-rent schemes – its first steps to realising its ambitions for a 10,000-home portfolio.
The retailer plans to build over its Waitrose shops in Bromley and West Ealing in Greater London, as well as replacing a vacant John Lewis warehouse in Mill Lane, Reading, for its first rental homes.
Chris Harris, property and development director at JLP, told EG the business is in discussions with a potential development partner for each location. It has already appointed development managers, which include CBRE.
The company is also in talks with potential forward-funding partners for all three sites, as it prepares to lodge planning applications next year.
Internally, the partnership is building its team to support its residential drive, most recently recruiting former Apo deputy managing director Simon Chatfield as its head of BTR in April.
There will be “hundreds” of homes across the first three sites, which are wholly owned by the partnership along with around 100 Waitrose freeholds in its existing 331-store supermarket portfolio.
“We don’t just want to be the owner and developer of these sites but the operator of them too,” said Harris. “We see that as being the key differentiator.
“The market is still relatively new in the UK, so it gives us the opportunity to shape what it could look like here. We have got strong service credentials, a trusted brand and also a decent pipeline of sites.”
Harris added: “As a partnership, we can approach this in a different way to others. We are being thoughtful about making great homes and communities for people to want to live in for the long term. Getting a broad cross-section of residents in the building will be key for us.”
Each scheme will be “reasonably significant” in scale, with offerings set to include studio, one, two, three and four-bedroom rental flats, as well as affordable aspects through a “pepper-potting” approach. Shared spaces and facilities such as roof gardens and fitness studios are also expected to feature.
The flats will be designed to appeal to a broad customer base, with short and long-term tenures on offer. These will also be furnished by John Lewis.
Public consultation rounds will be held in Bromley and Ealing over the next few months, with detailed designs shown later in the year. A period of public consultation for the Reading scheme will also take place later in 2022.
Harris pointed to the housing need in each of the three locations, as well as their strong public transport links – the Elizabeth Line in particular was a major factor, serving both Reading and Ealing. “They are all well connected,” said Harris. “We also own the sites and [they] have gone through viability tests – those are some of the filters we applied to identify these as the first three sites.
“We also wanted to ensure the developments were of a meaningful scale, [enabling] us to be efficient in operating them.”
While rising construction costs is a concern, Harris expects the business can get “good enough” pricing and a sufficiently paced programme through its development partners. “It’s a concern, but it’s manageable,” he said.
The partnership aims to deliver 10,000 homes in the next decade, half of which will come from schemes within its own portfolio. Its BTR drive forms part of a push for 40% of its profits to come from outside of retail by 2030.
JLP set out its plans to enter the rental home market in 2020. Harris said: “It’s been a while in the making, but it’s great to see the idea become reality.”
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