John Lewis Exits house building venture...(BTR)

[ooid]

If you are massive brand and own the sites but still can't make profit for building your homes to rent, especially where you still have massive low supply....


https://www.standard.co.uk/business/john-lewis-exi...

[dave123456]

It’s likely a decision based on capital allocation as much as how profitable it is…

I think her strategy underpinned a desire to more to a rental model for furniture also, and a bit of a woke mindset to try and shed JL’s terribly middle class reputation.

Not sure it’s quite as much a sign of doom for housing development.

[deggles]

article said:

The surprise diversification was announced by Dame Sharon in October 2020 ...

Maybe it stacked up when the base rate was 0.1%. Now - not so much ?

[Simpo Two]

Looking at her Wiki page she didn't have much experience of the real world: https://en.wikipedia.org/wiki/Sharon_White,_Barone...

Got the job (how?), invested in something she didn't understand, lost money, left for the next big salary.

[ooid]

Simpo Two said:

Looking at her Wiki page she didn't have much experience of the real world: https://en.wikipedia.org/wiki/Sharon_White,_Barone...

Got the job (how?), invested in something she didn't understand, lost money, left for the next big salary.

Well, that is quite first optic indeed but when you look at fundamentals, it should make sense. They also collaborated with well*known players in the industry as joint venture so did not really jump into some unknown territory. I do not think there was a big investment, as they already owned the sites, perhaps operations and planning process but what is interesting, as a developer (with known partners), you have the site, you have the capital, you do have the brand but still struggling to get things build, complete and leave with profit.

[Jon39]

I remember that some county councils found themselves holding spare cash, prior to it being required for spending.
They had many meetings (their normal way of looking busy) and someone said, "How can we obtain a better return on this cash?".

Another idiot said, "My home has gone up in value and I did nothing to make that happen. We should invest the councils spare money in commercial property. The council will make a fortune. It is so easy. We could make even more money by borrowing, in the same way that I have a mortgage for my home".

Someone else at the meeting said, "That sounds brilliant. If you think you know something about this, I say we should go for it".
The motion was passed.

As we now know, all those idiots thought 0.1% interest rates would be the new normal, and continue forever.
The council eventually faced bankruptcy.
Was it Surrey County Council? There might have been others who also got involved with commercial property investment, using other peoples' money, in a subject they did not understand.