Professionals under the aegis of Nigerian Institution of Estate Surveyors and Valuers (NIESV) are canvassing improved joint venture developments as part of innovative ways of maintaining competitive edge, overcoming limitations and fostering growth in real estate market.

They noted that joint venture schemes have potential of reducing costs, sharing risk and can be used to access resources both human and capital for business development in the sector.

Speaking at the 2023 Mandatory Continuing Professional Development (MCPD) programme entitled:” Opportunities and Challenges in Joint Venture and Development Leases”, organised by NIESV Lagos branch, the lead facilitator/Chief Executive Officer, Prestigious Home Limited, Mr. Akintola Oladejo, 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 hyper-inflation 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.

Chairman of the occasion and former Chairman, NIESV Lagos branch, Mr. Samuel Ukpong, reiterated the importance of estate surveyors and valuers involvement in joint venture deals as they are qualified to achieve results. He urged practitioners to prioritise training as a means to grow in real estate practice.

On his part, Chairman, NIESV Lagos branch, Gbenga Ismail, observed that joint venture is a critical subject in the past four years due to increased growth in the real estate market. However, he noted that there have been some grey areas, such as understanding the roles of landowners, builders, and investors to reduce frictions.

Earlier, Chairman, MCPD Committee of the branch, Godspower Omozusi, said the capacity building programme enhances knowledge and competencies.

He said training and retraining of individuals and groups are critical to ensure real estate contributes to national economic development.