Around 1,000 new jobs are set to be created in Bristol with the building of a £35million distribution centre by two Birmingham property specialists.
Bristol City Council has given Gallan Group and Stoford the go-ahead to construct the 435,750sq ft facility at Avonmouth for the Co-operative Group.
The building is scheduled to be completed in early 2012. The scheme, which follows the Co-operative Group’s acquisition of Somerfield in 2009 that led to the closure of Somerfield’s Bristol head office, will bring £25 million into the local economy in terms of construction works and jobs. AXA Real Estate, Europe’s second largest investment fund, has agreed to finance what is regarded as a ‘perfect product’ following bidding from a number of leading investment and property companies.
Pre-let to the leading retailer on a 20-year lease at a rent in excess of £2.1 million a year, the distribution centre will serve more than 400 stores in Bristol, the South West and South Wales. It is part of the Co-operative Group’s reorganisation of its UK logistics following its acquisition of Somerfield in 2009.
The deal took 12 months to secure and involved detailed negotiations with key stakeholders including the Co-operative Group, the existing tenant Honda Motor Europe, and The Crown Estate Commissioners that own the 32.95acre site. Dan Gallagher, leading the project for Stoford, said: “We are delighted that unanimous approval has been given to a project that will bring a tremendous boost to the Bristol economy in such difficult times. The long-term commitment of such a high quality tenant will see £25million invested in the local economy in the next two years.” He added: “We knew we had a perfect product in terms of lease, location and tenant, which is why we had such an impressive level of bidding from top investors.” Karen Wilson, sister of Dan Gallagher and leading the scheme for Gallan Group, 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.”
The scheme will be delivered alongside existing occupiers, which include John Lewis, Scottish and Newcastle, Constellation Europe Expeditors and Avon and Somerset Police.” Rob Awford, Fund Manager for AXA Real Estate, commented: “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 and Stoford to deliver a scheme ideally suited to the tenant’s requirements, and beneficial to the local community, creating 1,000 new jobs.” Mark Leonard, The Co-operative Group’s Regional Head of Logistics, added: “We are delighted the project has been given the green light and work can get underway on the distribution centre that will create jobs and be a major boost for the local economy.” John Rogers of Drivers Jonas Deloitte acted on behalf of Gallan and Stoford for the investment sale.