Joint Venture in Kenya. 100% financing for Real Estate Projects. Highest Return on Investment .

Joint Venture in Kenya. 100% financing for Real Estate Projects. Highest Return on Investment .

Joint Venture for construction of buildings in Kenya is now a common occurrence . Many buildings are being financed this way. Notable buildings financed this way are the Suraya Housing project along Kiambu road, Everest park at Athi River and Project Snow Drop in Upper Hill.

Suraya Kiambu road.

Everest Park, Athi river.

Snow Drop, Upper Hill.


Why Joint Venture.

As the cliché saying goes, in Real Estate investment, there are 3 important points
1.Location.
2.Location
3.Location.

This means that not all potential Real Estate investors can get prime land. A good example of prime land is land fronting tarmac, land in Nairobi CBD ,Upper Hill, Westlands, Runda, Karen etc.

Land owners in such prime areas have 2 options to fund their Real Estate projects.

1.Sell part of the land to enable then raise 20 to 30% of the total project cost needed by the banks for them to release a loan of the remaining 70 to 80% of construction cost.

2. Look for a Joint Venture partner to raise the 20 to 30% needed by the banks as condition for releasing the 70 to 80% of construction cost.

In most cases, the Joint Venture scenario presents a win win situation since the development can be constructed with economies of scale and services such as parking can be easily availed in larger plot sized developments.


Joint Venture Return on Investment.

As a real estate investor, Joint Venture returns on average between 100% to 300% of the money put into the investment within 2 to 3 years. This is a very impressive return compared to the real estate average of 20 to 30%.

Example. 0.5 acre in Nairobi CBD outskirts Joint Venture.

The land owners contribution is kes 120m which is the value of the land.
The cost of construction is 400m.
For the land owner to obtain bank financing, he will require to have 20% of 400m in cash=80m.
This is a huge amount of cash so a JV win win situation is necessary.
The JV partner is required to inject KES 80m.
With this, he gets to be part owner of the land.

A Special Purpose Vehicle company is registered for this purpose whereby the land owner transfers the land into the company jointly owned by him and the JV partner.

Once the bank releases the loan to construct, houses are completed and sold off. After all expenses are deducted, a profit of kes 200m is realized.

The land owner gets the value of his land, kes 120m plus a share of the 200m, usually on a 50 50 split. He walks with kes 220m.

The JV partner after injecting kes 80m walks with the kes 80m plus kes 100m. This represents a 125% return on investment within 2 to 3 years which is quite impressive.

Conclusion.

For the land owner, a JV partnership represents the easiest way to unlock funding for development.
For the JV partner, the JV presents a situation for him to make over 100% return without having the need to buy land in a good location.

Francis Gichuhi Kamau, Architect.
0721410684

Francis Gichuhi (692 Posts)

Architect Francis Gichuhi . B.Arch. University of Nairobi. Registered Architect, Kenya. Member, Architectural Association of Kenya. Contacts. email info@a4architect.com. Telephone +254721410684


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  29 comments for “Joint Venture in Kenya. 100% financing for Real Estate Projects. Highest Return on Investment .

  1. September 13, 2014 at 8:18 am

    Helo? Am mr joseph ? Am looking for financiers for 4 jv projects in upper hill and in runda ? This ranges from 300m to 5billion do have financiers for the said projcts also looking for Equity funders ? For some other projects ?

  2. david
    October 29, 2015 at 1:10 pm

    I have 3 acre land in kitale Town ,the land is in the middle of residential apartments.if you interested in the joint venture of rental housing company you can give me your feedback in my email.

  3. Jephita Otuke
    March 9, 2016 at 8:40 am

    Hi my name is Jephita Otuke I looking for a joint venture with somebody to develope a 1/4 an acre in Ongata Rongai kindly advice.

  4. floice ohato
    April 28, 2016 at 9:18 am

    hi we have a residential house in umoja 2 is it possible to get it developed and not for sell but pay through rents paid. the returns made after completion

    • April 28, 2016 at 9:20 am

      not easy to find such a financier. email me details eg google map url, size of land etc.

      • Gladys
        January 18, 2017 at 1:40 pm

        I intend to put up student hostels in an area where the Student population is high and accommondation is in high demand. How can I get financing, I estimate financing in the tune of Ksh.50 million.

  5. Aldo Moschion
    May 15, 2016 at 6:28 pm

    am in the process of acquiring two acre near Kiserian town, which would like to put up a gated community of 16 units on 1/8th of an acre for sale and interested in getting a financier for the project

  6. JOHN
    June 16, 2016 at 10:10 am

    Hi. My name is JOHN.
    I have a one acre piece of land in a promising area fronting a railway station and in a busy town. I have the intention of building a shopping mall and already have the proposal in architectural drawings. The projected costs are estimated at Ksh350,000,000/= (Three hundred and fifty million Ksh) only. I need a partner for a JV. Kindly advice.

  7. Jacinta Wambui Karuku
    November 3, 2016 at 1:40 pm

    i have a quarter acre plot in waithaka next to the chiefs camp, waithaka health centre , MCAs office and also very near to Waithaka Shopping Centre l would like some Financiers to help construct residential apartments

  8. David Ambayo
    November 7, 2016 at 11:33 am

    my name is David,we have half an acre in wangige and would like to do a joint venture residential would you advice on financing

    • Peter kibugi
      June 12, 2017 at 4:11 pm

      Im located in Kabete and would be intrested in a J.V

  9. Eric
    December 14, 2016 at 8:38 am

    Great investment ,

  10. harrison mwangi
    December 30, 2016 at 12:44 pm

    looking for a joint venture for 3 br apartments for sale in nakuru kiamunyi area. estimated cost sh 80-100m

  11. Gladys
    January 18, 2017 at 1:43 pm

    I intent to put up student hostels in a area where we have two universities and accommondation is in high demand. I also have house in Eastlands which I want to demolish and put up modern self- contained apartments.

  12. Thomas Abincha
    February 24, 2017 at 2:57 pm

    I am located on sotik-kisii highway on the first row on Tarmac and I would like to convert my
    newly constructed residence which is already fully furnished with all utilities including borehole
    water to a hospitality facility ! The facility has high end finishes , an adjacent incomplete hotel/conference facility ! Would like to discuss with an interested investor and site visit can be arranged !

  13. Abdi
    February 24, 2017 at 4:54 pm

    I am looking for 100acres land for joint venture in Karen

    • Abdi
      February 25, 2017 at 6:55 pm

      Looking for 100acres for joint venture in karen

  14. Eric magondu
    April 19, 2017 at 7:37 pm

    Hi I have 140 acres in Nanyuki and am interested in a joint venture for estate development based on modern concepts of value addition. It’s freehold land with an absolute title. Please advise.

  15. May 16, 2017 at 8:03 am

    We wish to introduce our company the BUILDING MATERIALS CO. LTD. , based in Chengdu, China to all lovers of environment friendly modular homes.

    Our building materials are made from inexhaustible renewable resources at low production cost and are suitable for sustainable housing programs.

    Their load bearing capacity is 23 times that of cement, brick, concrete and other products in construction.

    The main features of our products are:

    1. “7 no” in modern building: no rebar, no cement, no brick, no girder, no column, no stone and no component.
    2.“7 proof” in high-technology housing: quakeproof, fireproof, waterproof, freeze-proof, crack prevention, mothproof and anti-aging.
    We are also interested in joint factory venture with prospective foreign investors.

    WE LOOK FORWARD TOWARDS SUGGESTIONS ON HOW TO PROMOTE OUR BUILDING MATERIALS AND POSSIBLE COOPERATION WITH COMPANIES OR CLIENTS.
    Yours
    Alfred Yang
    International Business Manager

  16. May 16, 2017 at 8:04 am

    We wish to introduce our company theBUILDING MATERIALS CO. LTD. , based in Chengdu, China to all lovers of environment friendly modular homes.

    Our building materials are made from inexhaustible renewable resources at low production cost and are suitable for sustainable housing programs.

    Their load bearing capacity is 23 times that of cement, brick, concrete and other products in construction.

    The main features of our products are:

    1. “7 no” in modern building: no rebar, no cement, no brick, no girder, no column, no stone and no component.
    2.“7 proof” in high-technology housing: quakeproof, fireproof, waterproof, freeze-proof, crack prevention, mothproof and anti-aging.
    We are also interested in joint factory venture with prospective foreign investors.

    WE LOOK FORWARD TOWARDS SUGGESTIONS ON HOW TO PROMOTE OUR BUILDING MATERIALS AND POSSIBLE COOPERATION WITH COMPANIES OR CLIENTS.

  17. Linus Maina
    June 19, 2017 at 1:13 pm

    Have a 1/4 acre plot touching tarmac along Thika super highway in Ruiru.
    Looking for more information in regards to JV.
    Rgds.

  18. June 24, 2017 at 10:11 am

    FRANCIS MASIKA
    HAVE 50FT BY 100FT PLOT AT SYOKIMAU WHERE THERE IS THE SHOPPING CENTER WHERE COMMERCIAL BUILDINGS CAN BE DONE AT THE GROUND AND THE FIRST FLOOR SECOND AND THIRD ONE CAN DO RESIDENTIAL HOUSE FOR SELL OR RENTING.
    IAM LOOKING FOR PARTNER TO DO THE PROJECT

  19. Nelson Ranginya
    July 23, 2017 at 10:46 am

    We have (40 by 70)ft plot next to Mombasa SGR Station suitable for constructing a high rise hotel for the ever busy train passengers.We are looking for a joint venture to implement this project.

  20. Salim
    August 17, 2017 at 5:18 pm

    We have half an acre of plot new jacaranda apartment next to kamiti prison we have ready approved plans for apartments for sale the plot is 71M off the main road can I get a developer

  21. kevin
    September 20, 2017 at 5:04 pm

    I have an acre in upper hill owner willing for joint venture email

  22. anne nick
    October 29, 2017 at 11:24 pm

    Hey i have a plot for residential in ruiru town and looking for joint venture to develop apartments.
    Many thanks

  23. anne nick
    October 29, 2017 at 11:25 pm

    Thank you

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