Insider Media Limited

A lack of warehousing space in the Midlands is leading some companies to build their own space, according to law firm Shakespeares.

The firm said businesses in the region are increasingly "taking matters into their own hands" without being aware of the risks and planning involved.

Virtually no new warehouse space has been developed since 2007 largely due to the lack of funding, which has encouraged companies to create their own, said Shakespeares.

Kevin Nagle, partner and logistics sector expert at Shakespeares, said: "Instead of waiting for new space to become available, a growing number of businesses are showing interest in building their own space and partnering with a developer who can help them to achieve this."

It cited that online grocery retailer Ocado is currently building a warehouse of about 350,000 sq ft at Birch Coppice in North Warwickshire.

Nagle said companies could be taking on a significant additional risk by following suit and should consider this before embarking on a 'build-your-own' space strategy.

"Under the old business model, property developers took on the majority of the risk by seeking funding to develop warehouse space before an end user had been identified. However, this model no longer works," he said.

"Retailers and third party logistics firms are beginning to think like developers. They are seeking to outsource or directly hire the talent needed to project manage a new warehouse development and then working with a developer on pre-agreed contractual terms to deliver it."

Shakespeares has offices in Birmingham, Stratford-upon-Avon, Nottingham, Moreton-in-the-Marsh and Shipston-on-Stour.