John Lewis has chosen Bromley, Ealing and Reading as the pilot locations for its venture into building branded homes for the rental market, as the staff-owned retailer tries to create new communities around its stores.
Unveiling its plans in detail for the first time, the company said its one-, two- and three-bedroom flats will be furnished with John Lewis products and come complete with communal areas such as roof gardens, gyms, flexible office space or meeting rooms where events will be hosted to bring people together. The spaces will be used to host community and social events, attracting renters with an offer that is about “more than just four walls”, the company said.
The group, which operates department stores and the Waitrose supermarket chain, is aiming to start work on the sites in 2024, subject to consultations with local residents which start later this year. Renters are expected to move in by 2027 as part of an effort to expand beyond retailing.
Homes will be built above two Waitrose stores, in Bromley, south London, and Ealing, west London, while a vacant John Lewis warehouse in Reading will also be transformed under the plan, which will see the John Lewis Partnership team up with as yet unnamed housing developers.
Energy efficiency and green space will be an important part of the developments as the company said it had “crowd sourced” ideas from staff who are renters to develop its plan.
John Lewis rental properties, at a mix of affordable and market rents, could become available before 2027 as the group is negotiating to apply the concept to other projects beyond its own estate in tandem with developers.
Nina Bhatia, the director of strategy at JLP, said: “The market for rental is growing and we have a shortage of housing.
“This [housing] will appeal to the core John Lewis and Waitrose demographic who are young and moving into becoming families seeking flexible, attractive accommodation that will give them what they need for every stage of their lives.”
She said John Lewis was aiming to create rental homes that offered something “distinctive” compared to existing landlords with the ability to personalise properties and with long-term tenure options and significantly reduced upfront fees to give residents greater flexibility and security.
“This is not just about the financial return but creating a community with housing and community space and the opportunity to be a resident somewhere that is more than just four walls,” Bhatia said.
“One thing we think that will be distinctive is community social events. A lot of people want to rent to be part of something.”
John Lewis has said it wants to generate 40% of profits from non-retail ventures by 2030 including developing 10,000 homes for rental, about half of which will be built on its own property estate. Up to 20 sites could see homes developed on them as the group tries to offset the squeeze on retail profits amid the shift online and move away from selling “stuff” to services such as Netflix, Spotify, holidays and events.
Building homes above supermarkets is not a new idea as retailers have used home building to help secure planning permission for new stores or tried to cash in on their valuable locations. Waitrose and John Lewis already have up to 20 sites with flats above, while Tesco, Sainsbury’s, Morrisons and even Lidl have also embraced the idea of building thousands of homes. Tesco is currently consulting on a plan to build up to 90 homes above its store in Finsbury Park, north London, for example.
However, the vast majority of those homes were built for sale with the retailers taking a cut alongside developers. John Lewis is aiming to build an ongoing business as a landlord, with the idea that it will provide a range of services linked to its stores that residents will be able to access.
Bhatia said the new venture harked back to the days when John Lewis housed shop workers above some of its department stores and built on its experiences running hotels for staff, who are known as “partners” because they jointly own the group.