Construction of Portsmouth Retail Park, in North Harbour, started this week and is expected to be completed next spring.
The £16.2m development will include eight shopping and food outlets and a gym on empty land next to Tesco Extra in Binnacle Way.
The first nine tenants of Portsmouth Retail Park are expected to be; Decathalon, Subway, Costa, Greggs, Pure Gym, Home Bargains, Jollyes pet superstore, Explore Learning and Quality Pet Care.
The development will be built by property business Simons Group.
Confirmation of the work has come as Portsmouth City Council agreed to buy the retail park in a bid to generate up to £1m per year as part of its property investment portfolio.
The council’s property and investment manager Tom Southall said: ‘This is all about making money for the council - money that can be spent on the vital local services the council manages in Portsmouth.
‘We are delighted to be funding an exciting new Portsmouth business development which will boost local jobs and strengthen the Portsmouth economy at the same time as generating rental income that can be used to pay for the things that matter most to the people of Portsmouth.’
Director of development at Simons Group, Graeme Cosgrove, said: ‘We are delighted that Portsmouth City Council has seen the site’s potential and we are looking forward to working with them as developer and contractor as the site takes shape over the coming months.
‘Simons has worked closely with the landowner to unlock this site and the space which will create this new investment, contributing to the viability and vitality of Portsmouth.’
The Portsmouth Retail Park investment will be added to the council’s expanding property investment portfolio which already includes 10 commercial assets, generating £4.3m of profit a year that funds local services.
The council said that more property purchases are set to be made in the coming months.