Final talks ongoing for new Waitrose, council says

Basildon Council is in final negotiations with Waitrose for a proposed store on a vacant Golden Jubilee Way site in Wickford, and said it would consider a compulsory purchase order if necessary; the land is currently owned by property company Heriot. The council also confirmed an M&S Food Hall opening later this year in Basildon's Eastgate Shopping Centre, agreed a council tax freeze (even as county and emergency service precepts rise), will retain weekly waste collections, pursue a 3,500‑seat arena and introduce four hours' free weekend parking in Billericay and Wickford. The developments, if realized, could boost local retail footfall and commercial property prospects, but execution risk and political scepticism leave outcomes uncertain.

Analysis

Market structure: A Waitrose win is a localized positive for premium food retailers (M&S Food halls - MKS.L) and for owners/operators of town-centre retail assets (Landsec LAND.L, NewRiver NRR.L, Hammerson HMSO.L) as vacancy and weekly footfall can rise in a concentrated catchment — estimate a 1–3% uplift in local retail sales and a 50–150bp improvement in centre occupancy over 12–24 months if the deal proceeds. The owner of the plot faces downward pressure on sale value if the council forces a CPO; this raises short-term negotiation leverage for the council and execution risk for the seller.

Risk assessment: Main tail risks are deal collapse or protracted CPO litigation (low probability, high cost — months of delay and legal fees), a UK retail cyclical soft patch that erodes discretionary grocery spend, and planning setbacks; expect headline volatility in local REITs within days and leasing/rents to adjust over 3–18 months. Hidden dependencies include wider Essex transport improvements and national retail sales (monitor next 3 monthly prints); catalysts: formal lease signing, planning committee vote, M&S Food opening (timed within 6–12 months).

Trade implications: Direct plays — small, tactical longs in MKS.L (1–2% portfolio) and selective landlords LAND.L/NRR.L (2–3% combined) with staggered entries after legal confirmation; target 10–20% upside over 6–18 months if occupancy and rent roll improve, stop-loss -8%. Options: express upside via 6–9 month call spreads on MKS.L (cost-capped) and buy 3–6 month ATM puts on HMSO.L (0.5% risk) as a downside hedge against retail malaise.

Contrarian angle: The market will likely overstate the transformational effect of one store; downside is underappreciated: a failed CPO or modest trade capture (<5% uplift) leaves landlords exposed to capex and repositioning costs. Conversely, if Waitrose triggers multiple premium entrants across commuter belts, select regional REITs could rerate by 10–15% — monitor lease signing within 60 days as the pivotal signal.

Key Decisions for Investors

• Establish a 1–2% long position in Marks & Spencer Group plc (MKS.L) within 2–6 weeks, targeting +10–15% upside over 6–12 months if M&S Food expansion continues; set a hard stop at -8% and consider replacing with a 6–9 month call spread to cap downside risk (allocate <0.5% premium).
• Add a 2–3% overweight allocation split between Landsec (LAND.L) and NewRiver REIT (NRR.L) after legal/lease confirmation or positive planning update (target +15% re-rate if vacancy falls 100–200bps over 12–24 months); hedge tail risk with 0.5% notional short in Hammerson (HMSO.L) or 3–6 month puts on HMSO.L.
• Buy 6–9 month call spreads on MKS.L (size to risk <0.5% portfolio) to express upside with limited premium, and purchase 3–6 month ATM puts on HMSO.L (or equivalent mall-heavy REIT) as a correlated downside hedge (size 0.25–0.5%).
• If no lease/planning confirmation within 60–90 days, cut REIT/retail longs by 50% and redeploy to defensive UK staples or cash; if formal lease is announced, scale into positions to reach target sizes within 30 days.