"Our rental property ambition was based on a very different financial environment: one with more stable investment returns, lower borrowing costs, and more affordable costs to build homes. A fundamental shift in the economic conditions that underpinned the venture when it launched has made this business model unviable for John Lewis moving forward."
"John Lewis began its push into housebuilding as a new way to bring in money but has struggled with what it said was a fundamental shift in the economic conditions that underpinned the venture when it launched. The retailer said other housebuilders were in a similar position, and added that housing development had collapsed in London."
John Lewis is shutting down its housebuilding division and abandoning plans to construct 1,000 homes across three sites. The employee-owned retailer cited significantly increased borrowing and construction costs compared to when it launched the residential development initiative in 2020. The company is also withdrawing from property management, ending operations once contracts with four residential buildings expire. This strategic shift aims to simplify the business and strengthen its financial position by concentrating resources on its core retail brands, John Lewis and Waitrose. The housebuilding venture, originally conceived as a revenue diversification strategy, faced challenges from dramatically altered economic conditions including reduced investment returns and elevated building expenses. Other housebuilders face similar pressures, with housing development particularly affected in London.
#retail-strategy #housebuilding-exit #economic-conditions #business-restructuring #property-management
Read at www.bbc.com
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