Checking out build-to-rent

15 June 2022

An early blog post on the site during the pandemic discussed reports that supermarkets and other large retailers were exploring the idea of building homes in the spaces above their properties, which could create construction and hire opportunities. 

You can read that earlier item here. At the time, press reports suggested that private equity firms were interested in buying supermarket chains for their ‘air rights’, the space above their properties that could be developed.

Several such organisations in Britain have already explored this idea, as the earlier item said, as well as redeveloping some of their sites to incorporate new properties adjacent to the stores.

The John Lewis Partnership has now announced the first three locations where it proposes to construct new built-to-rent homes. These include building over its Waitrose shops in Bromley and West Ealing in Greater London, as well as replacing a vacant John Lewis warehouse in Reading. 

The company, which is adapting in the wake of intense online competition and changing customer buying habits, aims to deliver 10,000 homes in the next ten years. Moving into the rental homes market is part of its long-term plan for 40% of profits to come from outside of retail by 2030. 

The homes would be built for different sized households with options for short and long-term tenure. John Lewis says it would encourage a sense of community through incorporating shared spaces and facilities such as roof gardens and fitness studios.

If so, that could indeed bring work to builders and equipment hirers at a time when the UK is still falling short of its new home target and construction activity has shown signs of cooling. 

Incidentally, earlier this year John Lewis dropped its time-honoured slogan of being “never knowingly undersold”, again reflecting online competition. Given the intense house price inflation in recent time, that might be a timely decision.