First John Lewis build-to-rent homes will be in Reading and London

 

Retail giant John Lewis is shifting its focus towards developing homes for the burgeoning build-to-rent sector, and its first three locations have been revealed.

The build-to-rent sector has been going from strength to strength in recent years, as more institutional and individual investors have begun to back the growing asset class. Comprising purpose-built rental homes, the sector specialises in creating rental communities in popular locations.

Now John Lewis, known for its high-end department stores across the UK, has stepped into the fold as it branches out into residential developments. It will offer both short- and long-term tenancies, with the option for fully furnished, and rents at both market value and affordable levels.

Last week, it revealed its first three locations for its build-to-rent projects: Bromley in South London, Ealing in West London and Reading in Berkshire, which is fast becoming a popular commuter town to the capital as well as an attractive location in its own right.

Work on the sites is expected to start in 2024, subject to consultations with local residents. Tenants are expected to move in by 2027.

What will a John Lewis home be like?

The new rental properties have been described as “more than just four walls” by JLP’s director of strategy Nina Bhatia. Like much of the build-to-rent sector, the homes are focused on offering a bit more than a standard rental to tenants.

The developments will be made up of one-, two- and three-bedroom flats. They will be furnished with John Lewis products, and will include communal areas such as roof gardens, gyms, flexible office space and meeting/events rooms to host community and social events.

The properties in Bromley and Ealing will both be situated above Waitrose stores. In Reading, an empty department store will be converted. The company have said there will be a focus on energy efficiency and green space, both of which are increasingly important to tenants.

Bhatia said: “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.”

The homes will be available with reduced upfront fees and long-term tenancy options, allowing for more flexibility and security for tenants.

The rise of build-to-rent

The retailer is planning on creating 10,000 rental homes by 2030, of which around half will be built on its own property estate. It says it wants to generate 40% of profits from non-retail ventures by 2030.

John Lewis is not alone in branching out into the build-to-rent market. Other big names such as Legal & General and Lloyds Bank have also recently invested.

Demand across the UK’s private rented sector has continued to climb over recent years, and many in the industry believe build-to-rent could be crucial for increasing the supply of rental properties. It also has the potential to target a growing demographic of long-term renters.

Figures from the British Property Federation (BPF) show there are now 212,177 homes in this niche sector, of which 70,785 are complete, 42,119 under construction and 99,273 in planning. This number has been multiplying rapidly over recent years, and many expect it to escalate.

According to Dave Butler, the former CEO of the UK Apartment Association (UKAA), the sector has become more accessible to tenants in recent years, and is also an appealing property investment option.

“The build-to-rent sector is characterised by sustainable, predictable returns generated by providing customers with experiences that they value,” he says. “It depends on loyalty and maintaining quality of service over the long-term.

“BTR started by providing high-end property to customers with significant disposable income, but its growth has and will continue to be driven by ordinary main-stream renters.”

BuyAssociation specialises in sourcing buy-to-let, build-to-rent and owner-occupied property investment opportunities across the UK. Get in touch to find out more. 

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John Lewis build-to-rent

First John Lewis build-to-rent homes will be in Reading and London

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