John Lewis enters the housing market

The retailer is in talks with Kensington and Chelsea council about turning the site, now used as an online shopping collection point and storage facility, into a luxury scheme.

A spokesperson for John Lewis said it would make commercial sense to develop the site. She said: “John Lewis can confirm it is in discussions with Kensington and Chelsea’s planning department to ascertain the viability of developing its Draycott Avenue warehouse site for residential use.”

It is understood that John Lewis will enter into a joint venture with another developer for a residential scheme. Architects are looking at options for the 0.5 ha site.

The move is significant as it will be John Lewis’ first foray into residential-only development. Housebuilders are now speculating whether this is a one-off or the beginning of a move into the property world.

David Pretty, the chief executive of Barratt, said the firm could bring a fresh approach to residential development.

He said: “This is obviously a new area but John Lewis has a good track record in retail. It would need to work with another developer to bring in expertise but has every chance of getting the best value out of the site.”

Supermarket chain Sainsbury’s used to own a development arm, J Sainsbury Development, but sold it off in 2004 for £199m.

Tesco is working on plans to develop a store in Southwark, south London, as part of a mixed-use scheme including 320 homes.