Should you in­vest in joint de­vel­oper projects?

De­vel­op­ers can of­fer good dis­counts to those in­vest­ing in their share of the project, but watch out for qual­ity vari­a­tion

HT Estates - - HTESTATES - HT Es­tates Cor­re­spon­dent

Ein­com­ing de­vel­oper can de­velop a smaller project while the main de­vel­oper gets re­lief by way of bring­ing in mul­ti­ple part­ners. This also im­proves his cash po­si­tion by giv­ing him ac­cess to money as part of the joint devel­op­ment, or in case the in­com­ing part­ners buy a smaller piece of the larger land par­cel.

Also, de­vel­op­ers are keen to hive off land parcels which they do not in­tend to de­velop in the im­me­di­ate fu­ture, or sim­ply lack the fi­nan­cial mus­cle to de­velop. De­vel­op­ers are part­ner­ing in the fol­low­ing ways:

Un­der­tak­ing joint de­vel- op­ment agree­ments – The in­com­ing part­ner de­vel­ops and mar­kets the project, while the main de­vel­oper only gives away devel­op­ment rights while re­tain­ing own­er­ship of land Sale of par­tial land hold­ings in town­ships - The de­vel­oper sells off smaller parcels of the main land bank to many de­vel­op­ers to ex­e­cute smaller projects, while cre­at­ing the to­tal town­ship project Out­right sale of land par­cel - The de­vel­oper sells off land that he is not de­vel­op­ing in the near fu­ture, pri­mar­ily with the ob­ject to im­prove

his cash po­si­tion.

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