John Lewis drops ambition to build an empire in the property sector

Despite initial success in the rental arena, the retail giant has stepped down after its plans to move into construction of homes hit obstacles.

- By Emma Haslett

Residents of the 362 apartments at The Clarendon Quarter, Leeds, live in a scene from a John Lewis ad. Their rented homes are furnished with the department store’s signature neutrals; downstairs, a lounge features sofas and coffee tables straight from its showroom. A gym and a communal roof garden are equally tasteful.

The building has been managed by John Lewis since 2023, part of a £500m partnership with Aberdeen that saw it take over four of the investor’s blocks of rental homes; Aberdeen would then finance the construction of three more. But last week John Lewis pulled the plug, saying a “fundamental shift in economic conditions” meant it was no longer viable. It was a sign of just how perilous things are for UK housebuilders.

John Lewis first announced plans to build 10,000 rental homes in 2021. Dame Sharon White, its then chairman, called it an “obvious extension” of the company’s strategy: it could, she suggested, “furnish properties using John Lewis Home products and deliver Waitrose food”.

The announcement raised some eyebrows in the sector (“John Lewis’ entry into the market is more remarkable than its exit from it,” a senior person at a major build-to-rent operator told me), but many welcomed it. “I thought, great,” said James Pargeter, a senior advisor at the rental consultancy GAA Living. “People will know they're going to provide quality without being top-end luxury. Who wouldn't want that?”