Joint Venture in Real Estate

What Is Joint Venture? 

A joint venture is a business arrangement where two or more parties work together on a common goal. Each party in a joint venture agrees to put their resources together on a particular project. The resource could be in form of knowledge, expertise, or tangible and intangible assets.

A joint venture in real estate is a system where two or more entities partner together on a real estate project which could range from building residential and commercial properties to erecting social infrastructures.

Commonly in real estate joint ventures, one party may be in charge of providing the land to build on while the other party manages the funding and execution of the project from start to finish. Both parties operate on a pre-agreed term to determine how profit is shared at the end of the venture project.

In Nigeria, joint venture collaborations are now a common practice amongst property developers and landowners. Some landowners who have properties in highbrow or developing neighborhoods with a growing population and housing demand prefer to enter joint venture agreements with developers as a way of preserving the asset and generating income through it.

Benefits Of Joint Venture:

  1. Each entity in a joint venture agreement enjoys the services or resources of the other party at little to no extra cost. Landowners can have their property developed at no extra cost to them and they still get part ownership of the finished project.
  2. Joint ventures make it relatively faster and easier to execute large-scale building projects to meet ever-growing housing demand. 
  3. Joint ventures are great for building brand equity. Entering a joint venture agreement with the government or a renowned company with a strong reputation can be a great way to increase brand awareness and authority in the market.

Join The Discussion

Compare listings


Enjoy this blog? Please spread the word :)