The John Lewis Partnership has struck a £500m deal with abrdn to build residential homes.
The department store chain will build the first 1,000 of the 10,000 homes it plans to construct on the sites of old shops and warehouses.
The deal should allow it to build on the sites of two former Waitrose shops in Bromley and West Ealing in Greater London, as well as a vacant John Lewis warehouse in Mill Lane.
The company will build the homes, kit them out with John Lewis furniture, then rent them out. The plans were first announced last year, when it stated around 7,000 of the homes would be built on sites in its existing portfolio, with the remainder constructed on new sites.
John Lewis stated last year that it wants to make around 40% of its profit from outside retail by the end of this decade.
Nina Bhatia, executive director for strategy and commercial development, said: “Our partnership with abrdn is a major milestone in our ambition to create much-needed quality residential housing in our communities.
“The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters.”
Neil Slater, head of real assets at abrdn, said: “The critical lack of quality rental accommodation in the UK needs to be addressed, so we are delighted to partner with the John Lewis Partnership to provide the required institutional investment.
“The ambitions and responsible ethos of our brands both strongly align, and our partnership should offer investors long-term returns and give residents confidence in a top-quality living experience.”
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