Are you looking for opportunity to invest but you are being derailed by lack of adequate resources? Do you have funds to invest but lack time and expertise to supervise an investment projects? Have you thought of joint venture real estate partner(s)? We are here to help you make your investment a reality. Joint venture is the way to go.
A joint venture involves two or more businesses or persons pooling their resources together and expertise to achieve a particular goal. The risks and rewards of the business are also shared. We are experts in arranging joint venture property investment in Kenya.
If you have land, finance, etc. and looking for a joint venture(s), you have landed on the right page for real estate joint venture in Kenya. With a joint venture, you will get access to more resources, greater capacity, increased technical expertise and greater access to established markets and distribution channels.
Do you know investing in joint venture real estate in Kenya is not limited to your objective of real estate investment? Developing and exiting through selling or renting out, buying a real estate product to realize a capital gain and rental yields or buying real estate backed structured projects, etc. are all areas you can explore jv real estate investment.
How to go about Joint Venture? The Process
Interested in attracting and connecting a property development joint venture partners in Kenya? We help you make this a reality. Here is the process;
(0) Finding the potential joint venture partners.
This is point zero and perhaps the single most step among equally important steps. Without interested potential joint venture partners, nothing will move on. We assist get the third partner. We generally arrange joint venture of two or three partners or more. A joint venture of two means we are not part of the joint venture. A joint venture of three is where we are part of the joint venture to bring our technical expertise and operational skills required to see through a successful project. After finding the required potential partners, the real joint venture steps keep in.
(1.) Project Appraisal – The first step always involves appraisal and usually begins with a site visit by the developer to identify the location of the property, its accessibility, the availability of infrastructure, the soil type, the terrain and other factors that affect development. The developer will then conduct a feasibility study to establish the best use of the property, project costs, revenues and the resulting potential returns from such an investment.
(2.) Project Proposal – The developer will then come up with proposal for the landowner showcasing the proposed concept, the budget, the revenues and the profit-sharing between the two parties,
(3.) Legal Due Diligence – When the landowner accepts the developer’s proposal, they are required to avail copies of the land title deed and deed plans for verification by the developer’s advocate. The advocate will conduct a search to establish the authenticity of the title deed, true ownership and that the land is free of any encumbrances. A surveyor will then be engaged to verify the beacons on the ground and confirm acreage on the title compares with the one on ground,
(4.) Signing of Agreements – Once due diligence is complete and is satisfactory the developer drafts a Joint Venture Agreement (JVA) and sends to the landowner’s advocate. Of the many challenges inherent to a JV, an agreement outlines all possible scenarios that might be a source of conflict and forges a path forward in the event that anything does not go according to plan. The following are some of the common clauses found in a JVA:
i. The capital obligations of each party,
ii. The partnership management structure,
iii. The rights and responsibilities of each party,
iv. Exit rights and transfer rights with respect to the sale or transfer of membership interests in the JV,
v. The downside protection for the land value contributed by the landowner, and
vi. The profit sharing mechanism.
Both parties’ sign the Agreement once they agree to the terms and conditions laid out.
(5.) Formation of a Special Purpose Vehicle (SPV) – Upon signing of a JVA, a special purpose company is formed with the aim of fulfilling the objectives of the JVA. The company is then registered as a private Limited Liability Company (LLC) or as a private Limited Liability Partnership (LLP) by the registrar of companies,
(6.) Transfer of Land to the SPV – Once the company is formed, the landowner is required to avail the title deed and other relevant documents required for the transfer of the land ownership in favor of the SPV,
(7.) Project Commencement – The developer then begins execution of the project through procuring of the project team including the architect, project manager, the engineers and other consultants. The developer oversees the project through to completion,
(8.) Project Completion – Once construction is complete, the landowner and the developer share profits in accordance to the terms of the JVA. Profits shared may be in form of cash or units such as houses or apartments.
Are you ready for property jv Kisumu, property jv Nairobi, property jv Kakamega or property jv Kenya? West Kenya Real Estate Ltd is the company to reach out to with your proposal. Looking for someone with land to partner or having land and looking for a developer? Talk to us today.
We identify people ready for this kind of joint venture, handle construction and after construction has competed we manage the property.
Talk to us.