Listed real estate investment trust LXi REIT has agreed to fund £10m for the development of a new discount retail park in Bradford to be anchored by a 20,000 sq ft Aldi store.

The discount supermarket has pre-let the space at the development alongside Home Bargains owner TJ Morris, which will take a 16,000 sq ft store. Aldi has signed a 20-year lease and TJ Morris a 15-year lease.

A further 5,000 sq ft unit has been pre-let to discount frozen food retailer Heron Foods, which has 240 stores throughout the Midlands and North of England. The unit has been pre-let on a new 10-year lease.

The Yorkshire property includes an additional 5,000 sq ft retail unit that the developer is currently marketing.

The new development is based on a 6.4 acre site, which includes parking for 210 cars, located 2.5 miles west of Bradford city centre.

LXi partner John White said: “We are delighted to provide the forward funding for this new discount retail development anchored by Aldi and Home Bargains. Aldi and Home Bargains are very strong tenants and successful companies in the fast growing discount retail sector.

“The 6.15% net initial yield is above the company’s target average yield and the property will benefit from a strong residual value given the dense catchment population and low starting rents.

“We are also in advanced discussions on a number of similar discount retail projects, as well as additional pre-let forward fundings and built assets in other sectors, which are expected to come to fruition shortly.”