Joint ventures in property transactions

A property joint venture (JV) is an arrangement between two or more parties under which they combine disparate contributions in order to derive value from the development, acquisition or management of property. Although in the vast majority of instances that value will be measured in terms of income or capital profits, there are some joint venturers (such as local authorities) who participate for social reasons (eg in relation to urban regeneration schemes, community projects, etc). The contributions made by the joint venturers will usually involve some combination of:

1. •

   cash, or the ability to enter into financing commitments

2. •

   tangible assets, eg land

3. •

   intangible assets, eg expertise, intellectual property, construction services, contractual rights, etc

Property acquisition, investment, development and funding often involves collaborative JVs between a number of parties (property companies, on and off-shore investors, developers, land owners, public sector bodies and funders) who contribute capital, property, resources and skill and share risk. Parties to a JV need to consider:

1. •

   commercial issues surrounding purpose, creation, management, profit and risk sharing and termination of the JV

2. •

   the choice of 'vehicle' or structure for the