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High street brands diversify into property

Hollie Chapman
Content Manager

John Lewis and Lloyds Banking Group have both recently announced plans to diversify into the residential property market.

John Lewis plans to build over 10,000 homes over the next few years to address the national housing shortage and support communities, around 7000 of which will be built on sites it already owns. The company also said that all housing developments would feature a Waitrose store near the entrance and come with a concierge service. Leveraging its brand values, tenants will have the option to rent a property fully furnished with John Lewis products.

Lloyds Banking Group has said it aims to buy 50,000 homes in the next decade, which could see it become one of the UK’s biggest private landlords. Operating under its recently launched Citra Living brand, the FT reported that Lloyds plans to acquire around 400 properties by the end of 2021, with a “strategic challenge” of reaching 10,000 properties by the end of 2025.

Is this a good thing?

For shareholders, certainly! The move by big high street brands into residential property may come as a surprise to many. However, considering the downward trend of the high street, low interest rates and the impact of Covid-19 on retail, the property market offers relative stability and long-term growth.

What does this mean for landlords?

The repurposing of retail space into residential will help towards the housing shortage and rebuilding of city centre communities. However, Lloyds is the UK’s biggest mortgage lender and its property strategy poses a risk of competing with its own customers.

The John Lewis plans raise questions for landlords about the quality of their rental property and their proposition. Are we going to see a new cohort of professional tenants with different expectations from rental properties - of a high quality, fully furnished residence with premium amenities on the doorstep?

We’ve seen this executed successfully elsewhere, with the growth of design-led student accommodation and high-quality HMOs with communal living areas, games rooms and gyms - who can then charge a premium rent.

  • What can landlords learn from John Lewis’ approach?

  • Have they spotted an opportunity that you can apply to your local market?

We’re likely to see more big businesses entering the property market. It’s certainly an area for landlords to keep a close eye on and consider as part of their ongoing property strategy.

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Hollie Chapman
Content Manager

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