By Mark McSherry — Abrdn and the John Lewis Partnership have announced a joint venture to build 1,000 new homes in three build-to-rent schemes in London and the South East of England with a gross development value of £500 million.

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.

“The joint venture brings together a strong complementary set of capabilities: the extensive investment management experience of Abrdn, one of Europe’s largest investment managers with £7.4b (30,000 units) of residential assets under management, and John Lewis Partnership’s trusted brand with its high standards of service,” said Abrdn.

“It creates a unique platform for the UK’s growing build-to-rent market, which to-date, has largely been confined to specialist real estate companies.

“The deal remains subject to the satisfaction of agreed completion conditions.”

Neil Slater, Head of Real Assets, 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.”

“We are really pleased to continue to expand abrdn’s capabilities in real estate and evolve our client offering through this exciting partnership.”

Nina Bhatia, Executive Director for Strategy and Commercial Development at the John Lewis Partnership, added: “Our partnership with abrdn is a major milestone in our ambition to create much-needed quality residential housing in our communities.

“Our residents can expect homes furnished by John Lewis with first-rate service and facilities.

“The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters.”

The new homes are planned for Bromley and West Ealing in Greater London and Reading.

The John Lewis Partnership said: “The deal marks a milestone in the Partnership’s plans to use its significant property assets to build much-needed residential homes and diversify our business.

“The joint venture will help us to reach 10 percent of our ambition to build 10,000 new homes over the next decade.

“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.

“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.

“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.

“The sites were chosen according to their central location and proximity to transport links.

“The ‘build-to-rent’ residential property market is estimated to double with 30k build-to-rent homes completed annually by 2026.

“The sector has a key role to play in addressing the shortfall in rental homes, which is set to increase further with the government’s help to buy scheme now coming to end. In London alone there is a shortfall of 75,000 rental properties.”