JOINT VENTURE FOR DEVELOPMENT OF HOUSES FOR SALE IN KENYA
Prism Designs Africa www.a4architect.com offers Joint Venture partnership with land owners in order to develop houses for sale within Kenya.
This Joint Venture is financed by Shelter Afrique bank on a 50-50 sharing on the proceeds from sale of the houses. The land owner is then granted an additional amount being the value of the land.
Prism Designs Africa will first carry our preliminary project structure to ascertain viability. Basically, the debt ratio should be as per Shelter Afrique’s requirements and the plot location should be in an area where the houses can attract buyers once constructed.
To be eligible for the Joint Venture, the land must be a minimum of 5 acres for land suitable for apartment development and 10 acres for land suitable for bungalow and maisonette development.
The larger the size of the land, the higher the chances of the project being eligible for the Joint Venture.
Lands situated in middle to low cost areas also have a higher chance of eligibility than lands in high-cost areas.
HOW IT WORKS:
1. The land owner expresses willingness to Prism Designs Africa www.a4architect.com to get into a Joint Venture for construction of houses for sale on his land.
2. Prism Designs Africa www.a4arhcitect.com visits the land site and carries out a feasibility study to determine the most viable options available and the cost of the project.
15% OF TOTAL PROJECT COST
3. Prism Designs Africa www.a4architect.com calculates 15% of the total construction cost. The land owner is supposed to bring in 15 % of this total cost. If the land value is less than 15% of total project cost, Prism Designs Africa will contribute Professional services [Architecture, Quantity Surveying, Structural Engineering, Mechanical Engineering, Civil Engineering and Electrical Engineering] to top up the balance.
4. Once the contribution of 15% of total project cost is reached, Shelter Afrique bank arranges for financing of the remainder of the costs.
50-50 PROFIT SHARING + REFUND OF COST OF LAND
5. Once financing is secured, construction and off-plan sales of the houses commences . Once the houses are complete and sold out, the profits are shared equally between Shelter Afrique bank and the land owner. The land owner is given a further amount to cater for the value of the land.
6. The land owner can now settle the amounts contributed by Prism Designs Africa www.a4architect.com in raising the contribution to 15% of the total project cost.
Prism Designs Africa www.a4architect.com recognizes the value of commission agents in sourcing for land owners who require Joint Venture partnerships with developers.
Prism Designs Africa offers 1% of the construction cost as agency fees to these commission agents.
Usually, the construction costs run into hundreds of millions of shillings since the minimum construction costs to be eligible for this Joint Venture partnership is KES 200,000,000. In this case, 1% of KES 200,000,000=KES 2,000,000.00.
For more information regarding this, contact Prism Designs Africa www.a4architect.com.
Francis Gichuhi Kamau
Prism Designs Africa