The John Lewis Partnership has decided to withdraw from its Build-to-Rent (BTR) property business, citing a sharp change in the economic conditions that originally supported the venture.
The UK’s largest employee-owned retailer said the move reflects a “fundamental shift” in the financial environment since the project was launched in 2020, when interest rates were lower and development costs more predictable. The decision forms part of a wider strategic refocus on the group’s core retail operations.
Under executive chair Jason Tarry, the partnership is concentrating on strengthening its flagship brands, improving store standards, investing in digital capabilities and upgrading its supply chain. Tarry, who previously held senior roles at Tesco, took on the role last year as the business sought to stabilise performance after several challenging trading periods.
The BTR initiative was a cornerstone of a diversification strategy introduced by former chair Sharon White, who had set a goal for 40% of group revenues to come from outside traditional retail. That target has since been abandoned as the partnership reassesses where it can generate sustainable returns.
“Our rental property ambition was based on a very different financial environment – one with more stable investment returns, lower borrowing costs and more affordable construction,” a spokesperson for the partnership said.
While no homes were ultimately built, the company said it had made progress on three planning applications covering around 1,000 homes and had gained experience managing Build-to-Rent properties for third parties at four sites. Despite the exit, the partnership said it remained proud of the work carried out during the project.
The John Lewis Partnership, which operates John Lewis department stores and the upmarket Waitrose supermarket chain, is expected to publish its full-year financial results next month, offering further insight into how its renewed focus on retail is shaping performance.
