John Lewis may cut affordable flats development as delays pose challenge
What: Planning delays and viability concerns force John Lewis to reconsider the affordable housing component of its Reading residential development, part of the retailer's strategy to diversify revenue streams.
Why it is important: The case highlights how regulatory hurdles and economic pressures can impact retailers' efforts to diversify beyond traditional retail operations through property development.
John Lewis Partnership's Reading residential scheme faces significant challenges as planning delays and funding demands threaten its viability. The retailer, which had initially committed to making 10% of the flats affordable, has already reduced the development from 215 to 170 homes due to concerns over local service pressures. The company's advisers have warned that the scheme "would cost more to build than it is worth on paper" and cautioned that without timely planning approval, providing any affordable housing may become unviable. Despite these challenges, John Lewis has demonstrated commitment to the project by making design improvements and increasing green space to enhance community benefits. The Reading development is one of three such schemes being pursued by the partnership, with developments in West Ealing and Bromley having faced similar planning setbacks before eventual approval, illustrating the complexities of retail property transformation.
IADS Notes: John Lewis Partnership's challenges with its Reading build-to-rent scheme reflect broader shifts in retail property strategy throughout 2024-2025. As reported by Drapers in May 2025, the company achieved a significant milestone with the approval of its 428-apartment West Ealing development, including 83 affordable homes, as part of a GBP 500 million joint venture with Abrdn. This success followed September 2024's Retail Gazette coverage of the company's innovative approach to property assets, converting a former warehouse into affordable housing. However, these developments occurred against a backdrop of strategic refocusing, with February 2025's Drapers report revealing an GBP 800 million investment in core retail operations under Peter Ruis's leadership. The company's property strategy has evolved alongside its retail transformation, as evidenced by March 2025's Retail Bulletin coverage of tripled profits to GBP 126 million, demonstrating how property development complements rather than replaces retail excellence. The Reading scheme's challenges, particularly regarding affordable housing commitments, mirror broader industry tensions between commercial viability and social responsibility, while highlighting the complexities of obtaining planning approval for retail property transformation, as noted in October 2024's coverage of the Peter Jones store redevelopment plans.
