John Lewis Partnership has signed up Abrdn PLC (LSE:ABDN) as an investment partner in its plans to enter London’s property market, with the pair agreeing a £500mln joint venture to build 1,000 new homes.
Amid an estimated shortfall of around 75,000 rental properties in the capital alone, John Lewis said in June that it will redevelop some of its Waitrose stores to also include housing as well converting a vacant but well situated distribution warehouse, targeting the UK’s growing ‘build-to-rent’ market with a planned 10,000 homes over the next decade.
FTSE 250-listed investment manager Abrdn, the former Standard Life Aberdeen, will provide the required institutional investment for the first 10% of its housing plans.
Waitrose stores in Bromley and West Ealing will be turned into housing, assuming planning applications submitted next year are successful, while an unused John Lewis warehouse in Reading will also be revamped, according to the partnership.
“The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters," said the company’s commercial development executive, Nina Bhatia, who added the homes will be furnished by John Lewis.
In October, John Lewis boss Dame Sharon White suggesting the retailer was being hit harder from the elevated cost of living than it had been during the pandemic, with inflationary pressures and reduced consumer footfall leading the company to a £99mln loss in the first half of the year.
Commenting on the deal, Abrdn’s Neil Slater said: “Our partnership should offer investors long-term returns and give residents confidence in a top-quality living experience.”