What is a joint venture and why consider it?
A real estate joint venture is a deal between multiple parties to work together and blend resources to develop a real estate project. A lot of large projects tend to be very financed and developed as a result of real estate joint ventures.
Why would you even bother to just consider joint venture? There are several reasons that would drive you think of looking for a joint venture Kenya opportunity. In this article, I want to inspect ten possible the explanation why you should contemplate joint venture for your next real estate project.
- Share Investment
Joint venture enables you to share an investment which employing your current financial strength would not have been possible. By just welcoming a joint venture partner, you will want to find yourself sharing a massive investment capable of unlocking multiple financial gains and for long term basis.
- Shared Expenses
Joint venture lets you share construction expenses thus spreading the burden. Depending on the way the joint venture is structured, the load of expenses when shared will likely to be lighter and far much manageable.
- Technical Expertise & Know How
Through a joint venture, you will bring or connect with technically gifted and experience those who find themselves able to help you grow your knowledge. Not just real estate joint venture but even within other forms of joint ventures where companies or individuals team up for a specific venture. Certain times, a number of individuals are included in the deal on account of thier technical expertise in the subject matter.
- New Market Penetration
This is another reason why you should think of joint venture. Even if dealing in tangible products or offering a certain service, joint venture could be a really good route to entering a market or penetrating a market. Joint venture, you can obtain an entry into a market or obtain an already established market share and better it.
- New Revenue Streams
As a result of joint venture, another revenue stream is opened. Joint venture financing will enable you to get financing without.
6. Enhanced credibility
Through a joint venture, you are able to build your credibility in the market as a person or company that can be trusted. Through that, you will be able to win more benefits which will result into mutual benefits.
7. Away to navigate past barriers to competition
One of the methods to go around a competitor and obtain a competitive hedge is a joint venture. Through a joint venture, you are able to achieve a larger market share and thus go ahead of a competitor. At the same time, you’ll be able to enter the market which competitor made difficult to enter.
8. Improved economies of scale
When multiple parties or companies join hand to do a project, their combined effort will yield greater production thus obtaining a higher level of economies of scale. This will translate into better profit margin for the venture.
For example, two companies can start a joint venture agreement for product distribution. Through such arrangement, Company A will now distribute its products alongside the products of Company B and vice versa.
9. Intellectual property gains
A joint venture arrangement gives birth to a brand new entity and with that an intellectual property is born. This is added value to do a joint venture because of the worth of the intellectual property gained.
10. Synergy benefits
When two or more people get together, the resulting effect is more than what individual could have been obtained. When you invite a joint venture funding partner, you are likely realizing a greater synergy in your work because of the combined resources and expertise.
There is more to gain in a joint venture arrangement. This does not mean that there are no challenges but certainly, when you take care of the potential areas of challenges, the gains could there be for all to know. The trouble is where to acquire a joint venture partner?
Clique Joint Ventures (K) Ltd is a professionally managed joint venture deal sourcing company with network far and wide able to bring you a joint venture partner for your next project. With over ten years of experience brought in by top management, Clique Joint Ventures (K) Ltd is the place to take a trip to with your Joint venture needs.