So you own a piece of land in Lagos. Perhaps it has been in your family for years, or you bought it as an investment. You know it has value, but turning it into apartments, terraces or duplexes requires money, expertise, and time.
Selling it is one option. Building it on your own is another. But there is a third possibility: partnering with a property developer to build on your land.
This is known as a real estate joint venture, and it is an established approach to property development in Lagos.
A study published in the Journal of Surveying, Construction and Property found that joint ventures constitute a key part of the Lagos property development landscape
So, how does it work, and could it make sense for you?
What Is a Real Estate Joint Venture?
A joint venture is a partnership in which two parties combine resources to develop a property and share the benefits according to an agreed arrangement.
Typically, the landowner contributes the land, while the developer brings the expertise and resources needed to develop it. Depending on the agreement, the developer may also handle construction, approvals, project management, and marketing.
For example, imagine you own a suitable plot of land. A developer proposes building 10 apartments on it. Instead of buying your land outright, the developer agrees to develop the property and give you 3 of the completed apartments in return.
You retain a stake in the value created, while the developer gains access to land for a viable project.
The actual arrangement could involve more than completed units. It could also be in form of a share of sales proceeds or another agreed structure. The details depend on the land, the proposed development and the terms both parties negotiate.
Why Consider a Joint Venture?
➡️ You may not need to fund the entire development yourself. Construction involves high costs, from professional fees and approvals to materials and labour. A joint venture can allow you to participate in development without personally financing every stage.
➡️ Your land could become more productive. Rather than leaving the property undeveloped or selling it outright, you could receive completed units or another agreed return from the development.
➡️ You gain access to development expertise. An experienced developer can bring planning, construction, and project management capabilities that may be difficult or costly to assemble independently.
For developers, the arrangement also offers an opportunity to undertake viable projects without purchasing the land outright.
Of course, a joint venture is not a guaranteed profit. The outcome depends on the project's feasibility, the developer's capacity, market conditions, and the agreement itself.
What Should You Consider Before Partnering?
Not every developer or proposal will be right for your land. Before committing, establish a few things:
- The developer's track record: Have they successfully completed comparable projects?
- The land's potential: What type of development is suitable and financially viable for the location?
- The sharing arrangement: What exactly will you receive, and when?
- The responsibilities: Who will cover the costs, obtain approvals, and manage construction?
- The legal terms: Are the agreement, timelines, obligations, and provisions for delays or disputes clearly documented?
Have the land independently valued where appropriate, verify the title, and engage qualified legal and property professionals before signing. A clear agreement protects both parties and gives the project a stronger foundation.
Your Land Could Be the Start of Something Bigger
You do not necessarily have to sell your land to unlock its potential. With the right development proposal and the right partner, it could become the foundation for a project that benefits both you and the developer.
At Glendale Properties, we have successfully partnered with landowners to convert dormant or underutilized sites into high-end, multi-unit residential communities. We welcome conversations with landowners interested in exploring joint venture opportunities for viable real estate developments.
Have land you would like to develop? Speak to us today!