Discounter Home Bargains sign up to £10m forward-funded retail park

A £10m forward-funded investment in a new West Yorkshire discount retail park has been agreed.

LXi REIT has agreed to back the Bradford development, which is pre-let to Aldi and North West-based T.J Morris, trading as Home Bargains.

LXi will invest £10m, reflecting a blended net initial yield of 6.15% on the asset acquisition.

Anchoring the scheme will be a new 20,000 sq ft food store, which has been pre-let to Aldi, with a 20-year lease and no tenant break right.

A 16,000 sq ft unit has been pre-let to discount retailer Home Bargains on a 15 year lease.

A further 5,000 sq ft unit has been pre-let to Heron Foods which has 240 stores throughout the Midlands and North of England.

The developers are currently marketing a 5,000 sq ft retail unit.

John White, Partner of LXi REIT Advisors Limited, commented: “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.”