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
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.