John Lewis advisers have warned that it faces “extreme challenges” in making money from its scheme to convert parts of its stores into housing.
According to The Telegraph, plans to construct over 400 flats above a West Ealing Waitrose could cost the company far more than its worth on paper.
Planning documents have revealed the development could result in a negative return of £57m for the business.
Property consultant Quod, which carried out the early analysis, said the “financial viability of the scheme is extremely challenging”.
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Current predictions reveal that John Lewis’ scheme would be worth just £183m based on present-day values, but cost roughly £240m to carry out.
The project comes under one of the three housing schemes the business has in the works, under part of John Lewis Partnership chair Dame Sharon White’s attempts to diversify the company away from retail.
The business aims to generate two-fifths of its profits via non-retail areas by 2030.
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Funny enough The Telegraph doesn’t have comments on this article. I wonder why? Nothing to do with the saintly Sharon steering the company like an out of control shipping trolley then. Their core business is in enough trouble without getting involved in the rough and tumble of providing rental accommodation. It WILL end in tears
Cannot agree more with the Doug comment. John Lewis is in a mess, they’re not going to fix that anytime soon – so why enter a new high risk market that they know nothing about, whilst at the same time starving the main business of essential cash that it needs to stay afloat and to reenergise. This seemed like such a stupid idea when it was first announced, in todays climate its even more suicidal.
I agree with all the above, the leadership of the partnership is driving a HGV with flat tires into a cul-de-sac.
I fear for the future of the John Lewis partnership in providing rental accommodation. It will end in tears!
They should stick to what they know retail!