LONDON (Reuters) -British retailer the John Lewis Partnership is to turn some of its stores and a vacant warehouse into homes via a 500 million pound ($611 million) joint venture with investment company abrdn.
The employee-owned partnership, which owns a department store chain as well as upmarket grocer Waitrose, is trying to diversify its business and set out a plan in 2020 to generate 40% of its profit from outside retail by 2030.
It said the deal with abrdn will create 1,000 rental homes in Bromley and West Ealing in London, and Reading, southern England, delivering 10% of its ambition to build 10,000 new homes over the next decade.
Of those 5,000 would be from land on John Lewis' existing estate and the homes would range from one to three bed apartments.
In Bromley and West Ealing, Waitrose shops would be redeveloped to provide new homes and improved stores, while in Reading, a vacant John Lewis warehouse would be redeveloped.
The partnership said Britain's shortfall in rental accommodation is set to worsen as the government's "help to buy" scheme comes to an end. John Lewis said in London alone there is a shortfall of 75,000 rental properties.
“Our partnership with abrdn is a major milestone in our ambition to create much-needed quality residential housing in our communities," Nina Bhatia, the partnership's executive director for strategy and commercial development, said.
John Lewis has also diversified into product rental and resale and has expanded its financial services business into savings and insurance.
In September, it reported a loss for the first half of the year and warned that the outlook for the rest of 2022 was highly uncertain due to the impact of the cost of living crisis on discretionary spending.
($1 = 0.8178 pounds)