NIESV Embraces Joint Ventures for Real Estate Growth
The Nigerian Institution of Estate Surveyors and Valuers (NIESV) is championing the adoption of innovative joint venture developments. Industry professionals believe that such collaborations hold the key to overcoming challenges and ushering in a new era of prosperity.
Emphasizing the multifaceted benefits of joint venture schemes, NIESV professionals highlight their potential to streamline costs, mitigate risks, and provide avenues for accessing crucial human and capital resources.
This was at the 2023 Mandatory Continuing Professional Development (MCPD) programme entitled:” Opportunities and Challenges in Joint Venture and Development Leases”, organised by NIESV Lagos branch.
Speaking at the event, the lead facilitator/Chief Executive Officer, Prestigious Home Limited, Mr. Akintola Oladejo, according to The Guardian, listed critical issues affecting property developments, discouraging foreign investments and increasing construction costs such as lack of access to finance and increased borrowing cost of about 28 per cent, high cost of land acquisition and development, inadequate infrastructure, inefficient regulatory processes, as well as unfavourable government policies, insecurity and political instability.
He described joint ventures as a business partnership between two or more parties in real estate projects that provide innovative solutions to key development challenges, where each partner contributes expertise, resources, and capital in exchange for a share of the profits.
For such a scheme to succeed, Adedejo said agreements must specify partners’ role and responsibility, as well as define project timeline, outline funding structure and detail profits distribution modalities.
He said a property development joint venture requires planning, negotiation and management to ensure all partners align with the project, adding that the role of lawyers must not be taken for granted.
“A threat to JVs development is hyperinflation that can change project outcomes and parties not knowing each other. Once your agreements are a win-win, parties will be able to relate well and look forward to transparency in the deal. Sometimes, developers fail in JVs owing to the failures of parties in meeting terms of agreement. Sharing of profits must be along the line of equity contributions from parties,” Adedejo said.
The Chief Executive Officer, GMH Luxury Limited, Mr. Ayo Olanrewaju Kuyebi, who highlighted strategies for successful JVs, emphasised need for due diligence, clear and transparent agreement, independent valuation to determine cost of construction, flexibility and open communication, as well as inclusion of dispute resolution mechanisms in deals.
Other speakers including Managing Partner, Mark Odu & Company, Francis Okpaleke, Principal partner, Dapo Shonibare and Company, Shonibare Ibidapo and Chief Executive Officer, Caih Resources Ltd, harped on the need for conflict resolution/legal mechanism process, and strategies for off-plan sales.
