There are a number of ways to manage development costs or profit sharing in the following way: it is customary for state landowners to structure development agreements in the same way as the Lend-Leasing development agreement discussed above. The Lend-Lease decision is particularly relevant for developers entering into agreements under which the land purchaser has additional obligations to the seller with respect to infrastructure contributions, the sharing of revenue from the sale of the developed land or similar obligations to the seller. So we did it… We found an international developer with deep pockets and partnered with them to create a new joint venture company that allowed us to transform a 4 hectare plot of land into a 15- and 110-hectare development project. There are many forms of joint ventures and many reasons to enter into a joint venture, but in the development game we can limit the reasons to three key areas, which are country, finance and skills. Compared to other costs, the developer generally funds development costs until funding is available. Construction: The development of the group is a large company that requires the commitment of qualified and experienced professional collaborators – from architects in the design phase to construction contractors. Funding is needed over a longer period of time and you may even have to enter into complex agreements with different third parties. Landowners obviously have land and investors of course have money.
This is a great opportunity to create joint ventures and create successful partnerships between skills, country and finance. We, the real estate developers, must always be attentive to these kinds of opportunities where we can sell our equity skills as part of a well-structured agreement. Rehabilitation: Rehabilitation is a relatively easy renovation project, which is usually limited to moderate aesthetic work or interior redevelopment, instead of a major structural transformation or extension. Because of the short time scales associated with a project like this, the best way to finance is a small bridge agreement that looks like a short-term mortgage at a high annual rate (but it`s not the same). This is an area where you need legal advice. A poorly developed joint venture agreement can open up many risks as a developer and create a bad platform for creating a joint venture. Suppose a café currently rents its property, but has the option to buy it; Coffee owners want to take advantage of this opportunity, because mortgage payments are an investment, while continuing the rent is like throwing money away. The property means they can add the outdoor space they always wanted, but they couldn`t reach it because of the owner`s resistance.