September 25, 2023

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John Lewis agrees £500m deal with Abrdn to build 1,000 rental homes

3 min read
Rishi Sunak will hold talks with business leaders on Friday about a new support package for the hospitality sector after the chief medical officer urged people to scale down their Christmas plans.

The John Lewis Partnership has struck a £500m offer with the expense firm Abrdn to make 1,000 residential rental houses, redeveloping a few sites already owned by its Waitrose and eponymous retail store chains.

The team intends to redevelop Waitrose stores in Bromley and West Ealing, and a vacant John Lewis warehouse in Reading through, as the 1st component of a approach to make a whole of 10,000 new properties over the following decade.

The destinations for the new households, which will be furnished with products from John Lewis, have been selected because of their close proximity to transportation inbound links and central location.

The John Lewis Partnership, which noted a to start with-fifty percent reduction of £99m and warned that a rough run-up to Christmas could set its once-a-year staff members reward at chance this year, explained the shift into the rental industry would offer “a stable earnings for the partnership”.

Nina Bhatia, the govt director for technique and commercial improvement at John Lewis, explained: “Our partnership with Abrdn is a key milestone in our ambition to produce a lot-necessary good quality residential housing in our communities. Our inhabitants can expect residences furnished by John Lewis with first-level provider and amenities. The shift underlines our commitment to make on the power of our brand names to diversify further than retail into locations in which have confidence in seriously matters.”

The John Lewis Partnership mentioned that £500m represented the prepared progress price of the properties but would not give a breakdown of the level of financial commitment remaining committed by every single partner.

The websites will comprise one particular- to three-bedroom flats.

The first setting up programs for the joint-undertaking are envisioned to be submitted subsequent 12 months, when a community session procedure on the web-site in Reading is expected to start out.

If setting up permission is granted immediately after the initial submission for consent, building do the job at West Ealing and Bromley will start in 2024, with residents equipped to go in from 2027.

There is no timeline in location for Reading through because very first proposals for the progress of the web page are not due to be concluded till following year.

“We are continuing to evaluate other web pages which may allow us to convey forward homes quicker,” a spokesperson for John Lewis mentioned.

John Lewis reported the construct-to-rent residential property current market in the United kingdom is forecast to double in sizing, with 30,000 new houses accomplished every year by 2026, in accordance to investigate by the assets agency Savills.

There is approximated to be a shortfall of 75,000 rental attributes in London by yourself.

The announcement of the first developments, which are matter to planning permission, arrive as renters face large raises in costs, with non-public landlords fast increasing rents amid the price of residing crisis.

The John Lewis Partnership mentioned the lengthy-term joint-venture would also incorporate commitments to reasonably priced housing and sustainability goals tied to its pledge to grow to be a web zero company by 2035.

Neil Slater, the head of real belongings at Abrdn, mentioned: “The essential deficiency of quality rental accommodation in the Uk requirements to be dealt with, so we are delighted to partner with the John Lewis Partnership to offer the demanded institutional investment decision.”

The variety of homes on each and every web-site is nevertheless being decided. Nevertheless, the West Ealing web-site residences one of Waitrose’s much larger-scale supermarkets, with a gross sales place of 32,000 sq ft, while Bromley has a grocery store of 25,000 sq ft, as opposed with the normal store measurement of 21,000 sq ft.

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