In the recent years, the housing deficit in Nigeria was estimated to be around 17 Million. It was also projected that Nigeria will require about 59 Trillion naira to remedy this situation.
The imperative to build more houses is now driving increased property development in Nigeria with a focus on houses and apartments which are typically required. With the high interest rates from banks in Nigeria, property developers are constantly exploring innovative ways to fund projects. This opens up exciting prospects for property investors looking for better returns.
A popular financing structure favored by most developers is the joint venture property development wherein the investor or landowner provides the land as its equity while the developer along with other joint venture partners would provide expertise and/or funding for the construction. Alternatively, there may be multiple joint venture partners who would fund the entire project through a Special Purpose Vehicle.
In this article, we shall be examining the joint venture structure, which can be used as a way of financing property development in Nigeria.