AXA Real Estate Investment Managers, the leading real estate fund and asset manager in Europe, announces that it is to forward fund the development of a distribution center in Avonmouth, near Bristol, which has been pre-let to The Co-operative Group.
Acting on behalf of a single client mandate, AXA Real Estate will provide funding for the 435,000-ft² (approx. 40,000-m²) project, which is being developed by Midlands based property specialists Gallan Group and Stoford. The proposed distribution center has been pre-let to The Co-operative Group on a 20-year lease, with five-yearly rent reviews to 2.5% per annum fixed uplifts.
A planning application has been submitted and a decision is expected later this month. Subject to planning approval, completion of the development is expected in early 2012.
The distribution center will serve more than 400 stores across the South West England and South Wales as part of The Co-operative Group's reorganization of its UK logistics operations, following its acquisition of Somerfield in 2009. It will create around 1,000 new jobs in the area.
Rob Awford, Fund Manager, AXA Real Estate, said: "The forward funding of this development offers us the opportunity to invest in an asset which will benefit from secure long-term income with fixed uplifts from a high quality tenant. We look forward to working with our development partners Gallan Group and Stoford, to deliver a scheme ideally suited to the tenant's requirements, which will also be beneficial to the local community, creating 1,000 jobs in the area."
Dan Gallagher, Director of Stoford, said: "In the current economic climate, forward funding is one of only a few forms of development capital available so we are delighted to have an opportunity to work with AXA Real Estate and continue our long-established relationship with The Co-operative Group."