Abuja – December 12, 2023 – Viewpoint Housing News. .
As part of creative strategies to preserve competitive advantage, get around obstacles, and promote real estate market growth, a group of Professionals under the aegis of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) are advocating for better joint venture initiatives.
The possibilities for cost savings, risk sharing, and access to finance and human resources for the industry’s commercial development are all highlighted by joint venture plans.
Speaking at the NIESV Lagos branch’s 2023 Mandatory Continuing Professional Development (MCPD) programme titled “Opportunities and Challenges in Joint Venture and Development Leases,” Mr. Akintola Oladejo, the Chief Executive Officer of Prestigious Home Limited and the program’s lead facilitator, listed significant issues that affect property developments, deterring foreign investments and driving up construction costs. These issues include a lack of financing availability and increased borrowing costs of approximately 28%, the high cost of land acquisition and development, inadequate infrastructure, ineffective regulatory procedures, unfavourable government policies, insecurity, and political instability.
In his definition, a joint venture is a business collaboration in real estate projects involving two or more parties that offer creative answers to important development difficulties. Each partner provides finance, resources, and skills in exchange for a portion of the venture’s profits.
According to him, a joint venture is a commercial arrangement in which two or more parties collaborate on real estate projects offering creative answers to significant development difficulties. In exchange for a portion of the profits, each partner provides funds, resources, and skills.
Agreements defining participants’ roles and responsibilities, project timelines, finance structures, and profit sharing procedures are all necessary for such a scheme to work, according to Adedejo.
He noted that in order to guarantee that all parties are in agreement with the idea, a joint venture for property development needs preparation, negotiation, and management. He also added that the importance of attorneys’ roles cannot be overstated.
Hyper-inflation poses a danger to the growth of JVs.
“Parties not knowing each other and hyperinflation, which can alter project outcomes, are threats to the growth of JVs. Parties will be able to get along and look forward to openness in the transaction once your agreements are win-win. Developers in joint ventures sometimes collapse as a result of sides’ inability to fulfil their end of the bargain. Profit sharing ought to correspond with parties’ equity contributions, according to Adedejo.
Ayo Olanrewaju Kuyebi, the Chief Executive Officer of GMH Luxury Limited, emphasised the importance of due diligence, transparent and clear agreements, independent valuation to determine construction costs, flexibility and open communication, and the inclusion of dispute resolution mechanisms in deals when discussing strategies for successful joint ventures.
Other presenters, such as Francis Okpaleke, Managing Partner of Mark Odu & Company, Shonibare Ibidapo, Principal Partner of Dapo Shonibare and Company, and Chief Executive Officer of Caih Resources Ltd., focused on the importance of off-plan sales tactics and dispute resolution/legal procedure processes.
Mr. Samuel Ukpong, the occasion’s chairman and a past chairman of the NIESV Lagos chapter, emphasised the value of estate surveyors and valuers participating in joint venture agreements since they are competent to provide outcomes. In order to advance in their real estate practice, he recommended practitioners to give priority to training.
Gbenga Ismail, the Chairman of NIESV Lagos chapter, noted that, since the real estate industry has grown over the last four years, joint ventures have become increasingly important. He did point out that there have been some ambiguities, such as defining the responsibilities of investors, builders, and landowners in order to lessen conflicts.
Prior to this, Godspower Omozusi, the branch’s MCPD Committee Chairman, stated that the capacity development programme improves knowledge and competencies.
To guarantee that real estate contributes to the growth of the national economy, he added, it is imperative that individuals and groups get ongoing training.
