With the UK’s commercial property market being daunting at the best of times, joint ventures (JVs) have emerged as a pivotal strategy for developers and investors.
Rising land, materials, and construction costs mean that pooling resources can allow for greater potential for all partners involved.
What is a Joint Venture in commercial property?
A joint venture is when two or more parties come together with the intention of undertaking a specific project or developing a commercial property.
All parties combine their resources – be it financial, expertise, or otherwise – to achieve a mutual benefit.
The structure of the JV can vary from formalised limited companies to more informal contractual co-operations.
Why should I opt for a Joint Venture?
Things to keep in mind
Whilst an exciting premise, JVs in commercial property need to be well planned out so they don’t negatively affect the project.
A way to prevent this from happening is by having clear communication from the outset. Aligning objectives is also crucial, as differing goals or visions for the project can lead to conflicts.
There should also be a clearly defined exit strategy so that all partners have a clear understanding of how to conclude the JV, be it through selling the developed property, leasing it out, or some other means.
Finally, there should be thought given to the legal aspects of a JV in commercial property. Given that significant capital is at stake, setting the terms and conditions in legal agreements is essential. Legal complexities can also sometimes stall projects if not addressed promptly.
For legal advice on commercial property joint ventures, please get in touch today.
Director - Head of Commercial Department
I qualified as a Solicitor having completed my training with Mander Hadley in 1992 and am a member of the Law Society Property Section and The Warwickshire Law Society.
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