AXA Real Estate Investment Managers (AXA Real Estate) is to forward fund the development of a distribution centre 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 sq ft (40,500 m2) project, which is being developed by Midlands-based property specialists Gallan Group and Stoford. The proposed distribution centre 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 centre will serve more than 400 stores across the Southwest England and South Wales as part of The Co-operative Group's reorganisation of its UK logistics operations, following its acquisition of Somerfield in 2009. It will create around 1,000 new jobs in the area.

'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,' said Rob Awford, fund manager at AXA Real Estate. '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.'