Joint venture partnership is an interesting side of real estate success both in Nigeria and world over till date.
A terse definition of joint ventures will be “a synergetic contract between individuals or group of persons (corporate bodies) that have agreed to work together to achieve a certain set goal for the common benefits of the parties.
It is also built upon a platform where these contracting parties accept to complement each other especially in a situation where they can not be able to embark on the said project independently.
In Nigeria, joint venture partners are common in the oil and allied sectors and highly structured and developed unlike in other areas of enterprise.
may seem less obvious in the real estate sector in Nigeria to the uninitiated. There are however documented statistics of some very well established ventures around the country.
There are also joint venture partners between most developers financed by banks and some individuals or group of individuals who own land in strategic locations and do not want to sell.
Developers get into partnership with such people and agree to develop such place for their use for a definite period of time after which the land is returned to the original owner(s).
In the same vein some big time real estate firms get into partnership with government and some communities for development purposes not differing on the prevailing terms as mentioned in other examples.
Basically, whatever is lacking is usually the reason for entering into a Joint Venture. With this understanding, we come to realise that there are needs at both ends (parties), there is common interest to work together, there is high possibility of profit on top of the list, and there is a frame work for the relationship (Memorandum of Understanding, MoU) and also a timeline.
Consequently, a successful Joint Venture Partnership in Real Estate will demand/entail factors that will be dwelt on sequel to intelligent pre-engagement enquires that has direct bearing on the purposes for which the partnerships is contracted.
These factors are as follows:
A) Both parties must establish the importance of the Joint Ventures and what they stand to benefit from it. This is anchored on the grounds that the parties come to terms with what they have to invest in their various capacities which will form the basis of further terms of contract.
B) On the premise of the above, there is the need for a substantial legal framework for proper agreement that will be put in the books empowered by legal instruments and signed by a reputable lawyer. This is then considered as the confluence of the partnership and a working tool.
C) Everything on earth works at the currency of time. In other words a timeline is very important as it will serve as a guide and that will determine and measure the success of the Joint Venture.
D) Another very important factor is profit or reward of the use of land and a working percentage of how this is shared among the parties based on their inputs. This very factor is about the cardinal purpose for which the Joint Venture partnership is established.
Even though these are not the exhaustive checklist of what Joint Venture Partnership entails but the above will create the necessary platform. They are not without drawbacks at various stages but fundamentally working on these will provide sufficient security needed.
Debo Adejana, is the chief executive officer of Realty Point Limited. The company which is primarily involved on the supply side of the real estate industry, with a strong presence in Real Estate Development, Investment, Training/Consultancy.
If you are interested in joint ventures partnership with our companyyou can put a call/text to me through 08059100256 or send him a mail email@example.com