The employee-owned retailer confirmed it is withdrawing from the build-to-rent sector after concluding the numbers no longer stack up in today’s higher-rate environment.

The group had secured planning to build above existing Waitrose stores in Bromley and West Ealing and on a former industrial site in Reading.

Consented West Ealing plan of four high-rise blocks

In West Ealing, plans involved 428 flats in four high-rise blocks above the Waitrose store. Bromley would have seen 353 rental flats in a 24-storey block above the supermarket, while a further 170 flats were planned in Reading as part of a £70m scheme.

John Lews will complete final negotiations with local authorities before considering options for the sites’ future, which could include their sale to property developers.

The retailer said rising borrowing costs, higher build costs and weaker investor appetite had undermined the model originally conceived in 2020. Investment manager abrdn had been working with the retailer on the venture.

Reading scheme planned for brownfield site that will now be sold

A spokesperson said: “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.

“Unfortunately, the current climate – higher interest rates, inflationary pressures and a more cautious property market – has meant the model no longer meets the partnership’s investment criteria.

“Since we embarked on the rental property plans in 2020, we have made significant progress with our core retail strategy. This has seen us invest heavily in our customer offer for our unique brands, John Lewis and Waitrose, simplifying our business and strengthening our balance sheet.”

The retailer also confirmed it is exiting property management and will close that business once contracts covering four residential buildings come to an end.

The move marks a sharp retreat from what had been billed as a long-term diversification strategy, designed to generate steady rental income from surplus land and airspace above stores.

But with housing development activity in London sharply down and funding costs elevated, John Lewis has opted to refocus on its core retail operations and shore up its balance sheet rather than ride out the downturn.

The 833-studio room project is the tallest scheme of its kind in the UK to clear the Building Safety Regulator hurdle.

Contractor RG Group will deliver the developer’s first wholly co-living scheme under its new Vivus Living brand, which will be rolled out with further planned London projects.

Leeds-based Demolition Service is now expected to start site clearance work in April, with RG hoped to start on the Docklands site this Autumn.

The tower will deliver studios averaging 24 sq m, slightly larger than much of the current market, with amenity space distributed throughout the building rather than concentrated at podium or roof level.

Facilities will include commercial-scale gym space, spa and wellness areas, living and dining lounges and flexible workspace.

A hotel-style offer is planned, with 24-hour concierge, food and beverage services including room service, plus private meeting and function rooms.

As of last year, Olympian has 1.8m sq ft of PBSA and build-to-rent under construction across six sites. Marsh Wall marks its first pure-play move into the co-living sector.

Vivus Living will initially focus on London, where Olympian has identified a £2bn pipeline, before expanding into other major UK cities.

Savills has been appointed to seek equity partners for the Marsh Wall scheme and the wider Vivus roll-out.

Chairman and founder Mark Slatter said: “This milestone is the culmination of five years of hard work on the planning and the Gateway 2 process.

“It has not been easy, but the BSR regime is improving all the time.

“In my 33 years in the business, this scheme and the Vivus brand is by far the most exciting project I have been involved with and we look forward to finding the right equity partners in this still very challenging market to deliver this much-needed affordable alternative to BTR.”

Camden Council has driven the development model in partnership with Ballymore and Lateral for a challenging site at Camley Street bounded by railway lines and bisected by a large road.

The Council is bringing the scheme forward through its Community Investment Programme, which it argues sets up a development model for other councils to use at challenging inner city sites.

The approved plans knit together two brownfield sites at Camley Street to deliver 401 homes alongside more than 350,000 sq ft of office and employment space.

Around 50% of the homes will be classed as genuinely affordable.

The scheme will be delivered across six buildings ranging from eight to 30 storeys.

Site A will be home to three interlinked mixed-use terracotta/red brick blocks of flats ranging from 8 to 13 storeys, with Camden acting as lead developer.

Site B includes a 30-storey residential tower, a 12-storey commercial building, and a standalone eight-storey mixed-use building combining homes above with commercial space at ground level.

On this site, Camden provides the land on a long leasehold to the joint venture. While Ballymore leads on the demolition of Site B, the Council will initially fund these works, which will be later reimbursed by the partners alongside the first land receipt payment.

Over 200 private sale homes built by Ballymore on this site will generate the capital receipts that the Council is reinvesting to fund the social housing on Site A and other CIP projects.

Landscape-led design underpins the proposals, with new walking and cycling routes, play space and public squares prioritising health, wellbeing and biodiversity.

A car-free approach strengthens connections to Regent’s Canal and safeguards future links to the proposed Camden Highline, reflecting a wider shift among councils nationally towards low-car, active-travel neighbourhoods.

Camden said the development would generate more than 1,000 job and training opportunities, including apprenticeships and school placements, creating pathways into life science, technology and digital roles for local people while maximising the wider economic impact of the scheme.

The first homes are expected to be ready for occupation by late 2030.

The project team across both sites includes architects Feilden Clegg Bradley Studios and Morris + Company, Hoare Lea on MEP, Aecom and Gardiner & Theobald as cost consultants.