DEPARTMENT store group and Waitrose supermarket chain owner John Lewis Partnership has agreed a £500 million, “multi-decade” joint venture with Edinburgh-based fund management company abrdn to deliver around 1,000 new homes across three communities.

John Lewis Partnership hailed the deal as a “milestone” in its plans to use its “significant” property assets to build “much-needed residential homes” and diversify its business. It said the joint venture would help it reach 10 per cent of its "ambition" to build 10,000 new homes over the next decade.

In Bromley and West Ealing in Greater London, subject to planning permission, Waitrose shops will be redeveloped to provide new homes and “improved stores”. In Reading, a vacant John Lewis warehouse will be redeveloped.

Asked if these would be the only three projects in the abrdn joint venture or if this could be be extended beyond the 10% portion, a spokesman for John Lewis Partnership replied: “We have only announced these three sites at this stage. Our aim is for this to be a long-term partnership with abrdn and like any new partnership both parties will review before deciding next steps beyond these sites.”

The spokesman, asked if there were plans to build housing on property owned by John Lewis Partnership in Scotland and if so where, said: “We are continuing to assess opportunities across the John Lewis Partnership estate, but I'm afraid I can't disclose where at this stage.”

John Lewis Partnership said: “Within the UK’s growing built-to-rent property market, this is a long-term joint venture that brings together abrdn’s experience as one of Europe’s largest residential investment managers together with the trust, service and quality synonymous with the John Lewis and Waitrose brands.”

It added: “The deal will see the partnership develop and manage the proposed new sites and includes commitments to affordable housing and sustainability tied to our existing 2035 net-zero pledge. We want to create homes that will provide a stable income for the partnership, and moving into housing aligns with our purpose to make a positive difference for our partners, customers and communities.”

Setting out the detail of the three projects being progressed with abrdn, the spokesman said: “West Ealing would see us build a temporary Waitrose shop, knock down the existing shop and rebuild with homes above and around a new store. Bromley we will build new homes around the existing car park and [at] Mill Lane [in Reading] we will replace the vacant warehouse with a new building providing new homes.”

The sites were chosen according to their central location and proximity to transport links, John Lewis Partnership said.

Neil Slater, head of real assets at abrdn, said: “The critical lack of quality rental accommodation in the UK needs to be addressed, so we are delighted to partner with the John Lewis Partnership to provide the required institutional investment. The ambitions and responsible ethos of our brands both strongly align, and our partnership should offer investors long-term returns and give residents confidence in a top-quality living experience.”

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