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John Lewis advisers have warned that it faces “extreme challenges” in making a profit from its scheme to convert parts of its stores into new homes.
The plans would see 428 new flats built above a Waitrose in West Ealing and 353 in Bromley, with ambition to deliver 35% affordable housing on each scheme.
However, this could cost significantly more to build than it would be worth on paper, as planning documents show it risks delivering a negative return of £57m, The Telegraph reported.
Property consultant Quod, which carried out the early analysis, said the “financial viability of the scheme is extremely challenging”.
According to existing predictions, John Lewis’ housing scheme would be worth in the region of £183m based on present-day values, but cost roughly £240m to carry out.
The housebuilding project comes under one of the three housing schemes the business currently has, 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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