UK retailer John Lewis Partnership has plans to convert some of its outlets and a warehouse into homes through a £500m ($611m) joint venture with investment company abrdn.

This move is a strategy of the retailer to diversify its business and forms part of a plan in 2020 to generate 40% of its earnings from outside retail segment by the end of this decade, reported Reuters.

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The deal with abrdn will lead to creation of 1,000 rental homes in Bromley and West Ealing in London, and Reading, southern England.

This will enable the retailer delivering 10% of its plan to develop 10,000 new homes over the next 10 years.

Of the 10,000 homes, 5,000 would be developed on land of John Lewis’ current estate.

These homes would range from one to three-bedroom apartment units.

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The outlets of Waitrose, the upmarket grocery chain owned by the John Lewis Partnership, would be redeveloped in Bromley and West Ealing, into provide new homes and improved stores.

The vacant warehouse of employee-owned partnership would also be redeveloped.

With the government’s “help to buy” scheme coming to an end, John Lewis Partnership expects a shortfall in rental accommodation in the country.

In London, it expects a shortfall of 75,000 rental accommodation.

John Lewis Partnership executive director for strategy and commercial development Nina Bhatia said: “Our partnership with abrdn is a major milestone in our ambition to create much-needed quality residential housing in our communities.”

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Image: The deal with abrdn will lead to creation of 1,000 rental homes in Bromley and West Ealing in London, and Reading, southern England. Credit: John Lewis Partnership.