John Lewis has defended a plan to build homes to rent as the group files planning applications for projects in west and south-east London, and prepares to manage tenancies at three sites built by other developers. The John Lewis Partnership, which owns Waitrose supermarkets and a string of department stores, has pledged to build and rent out 10,000 homes as part of bold plans to generate 40% of profits from outside retail by 2030. “We are absolutely committed to this,” said Nina Bhatia, strategy director at the staff-owned group. “At a time when there is a housing crisis and people want homes to buy or rent we are making a huge contribution. John Lewis is offering quality service and security in a high quality home.” John Lewis is putting in the applications despite criticisms from industry experts who suggest it should be focusing instead on tackling deep problems at its retail outlets, where profits have dived amid heavy competition and shift towards online shopping. The group is also preparing to take on day-to-day management of apartments built by other developers imminently as a first step to test out some services and ideas that will be implemented at its own sites. “There is a shortage of housing and an excess of demand over supply,” said Bhatia, who is overseeing the build to rent plans. “We want to diversify and make the business more resilient and less cyclical, and build to rent is part of that. Is this a distraction? We have a very small team working on this. “Far from redirecting from retail ambitions, the projects above Waitrose stores enhance the quality of the retail stock and we are not only creating a new revenue stream and asset base but improving the quality of the retail experience in those stores.” The group has already held public consultations on its plans for the sites above and around Waitrose stores in west Ealing and Bromley and has tweaked details of the projects to reflect some feedback. The tallest towers in both sites remain, despite local opposition in Ealing where the council leader has accused John Lewis of trying to “bully through a scheme” that is too tall. The height of a lower tower in Bromley is being cut from 14 to 12 storeys alongside improved pedestrian and cycling access, while a cafe has been introduced as part of the redesign of the Ealing Waitrose store alongside an improved public piazza with more greenery and changes in the design of towers to make them appear more slender. “Community has been at the heart of our design,” said Bhatia. “We have responded to feedback.” It is hoped that planning permission for the projects, which will involve 428 new rental homes in west Ealing and 353 in Bromley – with one to three bedrooms and access to green space or balconies – will be secured later this year. Katherine Russell, head of the build to rent project at John Lewis, said the tallest towers – which are 24 storeys in Bromley and 20 in Ealing – were “right in the context of what we are proposing”. The group is aiming for 35% of the homes to be classed as affordable, despite warning in Bromley that only 20% affordable homes could be guaranteed without additional funding. Industry insiders have expressed scepticism that the target is commercially viable. Russell added: “We are not in this to flip and generate more profit for developers. This is going to be a long-term investment. We already are in these communities and will continue to be.” While the costs of the projects have risen since they were launched – given the rate of wage, materials and interest rate inflation – Russell said the projects had held their value and attractiveness to investors. She said the group hoped to appeal to key workers, such as those in the NHS, and be affordable to its own retail staff while offering services not available in other developments, such as gyms, co-working spaces and community rooms complete with kitchens. Plans for a third announced project at a vacant John Lewis warehouse in Reading, part of a £500m deal with the investment firm Abrdn to build 1,000 residential rental homes, are expected to be put forward later this year after a public exhibition later this summer. Half of the planned 10,000 rental homes are expected to be built on property the group already owns. John Lewis has been working on a plan to build flats for rent for about five years but the effort was made a prominent part of a turnaround programme launched in 2020 by then recently appointed chairman, Sharon White.