Boots have joined other high street names such as Lloyds Bank and John Lewis as companies diversifying into the residential property market.
This seems to be an interesting trend amongst these retail giants, not least because these companies will be best placed to lead the debate on what happens to vast swathes of commercial property that may no longer see demand from regular commercial occupiers such as offices and retailers, in a post-covid world.
With the well documented demand for residential rental properties, it is unlikely that this foray into residential property by these firms is likely to significantly change the world or the industry, nor are lettings agencies or the majority of residential landlords quaking in their boots just yet.
Although Boots are likely not to be the last of the big high street names to diversify into residential property in this way, with Morrisons purportedly considering its options with private equity backing too, it is unlikely that this will significantly change life for the UK property industry. Such is the pent up demand for quality, affordable accommodation, the inventory that they will likely introduce to the market will be quickly absorbed.
With large national concerns such as these type of retailers now becoming landlords, the only thing to watch is attempts by the treasury to drive corporate landlords out of the market in the same way that they have made the market for private landlords feel less than welcoming over the past few years. There are fears that as corporate landlords start to see profits from residential property investment flow in, there will be a political backlash that may see measures such as one-off taxes and rent controls being introduced. Only time will tell as to where this will go, but given that corporate entities are always likely to fall under greater public scrutiny, they will no doubt be making efforts to prove themselves as responsible landlords.
Richard Murray, CEO of Veco by Eurolink had a slightly different take on what diversification of the high street can mean for estate agents.
“If you look at the way our high streets are currently set up, Estate Agents are amongst the long term survivors. In most cases, estate agents are present on every high street of most town centres across the county. So much of this survival is due to the fact that agents form an integral part of communal life. There are some fantastic agents up and down the country who continue to contribute so much to their local communities.”