For partners with complementary contributions
Joint developments: different contributions, one development.
Some developments only work when several parties bring different things to them: one has the land, another the capital, a third the ability to develop, and sometimes an occupier is ready to commit before anything is built. A joint development puts those contributions together under one set of agreed rules.
Why joint developments exist
Real estate development needs land, money, development capability and, in the end, someone to use the building. They seldom sit with one party. A landowner may have an excellent site but no appetite for construction risk. An investor may have capital but no land or development team. An occupier may need a building without wanting to own land. A developer may have the capability but prefer to share the capital commitment.
A joint development lets each party contribute what it has and share in the result, instead of one party buying out the others' contributions at the start. It can make possible projects that none of the parties would take on alone.
What each party can bring
Each contribution comes with evidence to show and assumptions to agree. The questions are the same whoever brings it: what exactly is offered, what proves it, when it arrives and on what conditions.
Land
A site with its permitted use, access and services, contributed at an agreed value or in return for a share of the development. The other parties will want to see the documented right to develop it: who holds the title or development rights, in what form, for how long and with what restrictions. In Abu Dhabi, the Abu Dhabi Real Estate Centre's developer journey treats the developer's legal right to the plot, whether acquired by purchase or through a development agreement with the landowner, as a step of its own, separate from registering the developer and the project.
Capital
Equity to fund land, design, approvals and construction, and the standing to raise finance against the project. The other parties need to know how much, when and on what conditions, and whether it is committed or still to be raised.
Development capability
The ability to plan, secure approvals, procure and manage construction, and bring the finished asset into use. The partners agree who does each part, on what basis that work is paid and what happens if it falls behind.
Demand
An occupier's commitment to lease or buy, which reduces the risk for everyone else in the project. How firm that commitment is, and what happens to the project if it falls away, are assumptions to agree before anyone relies on them.
Construction or operation
A contractor or operator taking a stake in the project it will build or run.
Relationships
Connections to landowners, occupiers or operators that the other parties lack, valued like any other contribution.
Common structures
A joint venture and development management are easily confused, because a developer is involved in both. The difference lies in ownership and roles. In a joint venture the parties usually share in the project itself, its decisions and its results as agreed; under development management the owner usually keeps the project and its main decisions, and pays a developer to run it. The agreement decides in each case, and it should answer four things directly: who owns the land and the finished asset, who funds a cost overrun, whose approval a change needs, and how the developer is paid, by fee, by a share of the result or both.
Contractual joint development
The parties sign a development agreement setting out contributions, responsibilities and how proceeds are shared, without forming a new company.
Joint venture company
The parties form a company, often a special purpose vehicle, that owns the project, with shareholdings reflecting their contributions.
Development management
The owner keeps the project and appoints a developer to run it for a fee, sometimes with a share of the upside.
Long-term land rights
The landowner grants development rights, such as musataha or a long lease, and the developer builds and operates for the agreed term. See our page for landowners.
Governance that holds up
Joint developments usually run into trouble over decisions rather than money: who decides on a design change, a cost overrun, a delay or a new opportunity. Good governance settles those questions in advance. The agreement should say which decisions need everyone's consent and which the responsible party can take alone, how disputes are resolved, and what information each party receives and when.
In practice that means agreeing who decides what before money is committed: approval of the design and of each planning submission; the budget, the contingency and who may spend it; material changes to scope, cost or programme, and the point at which a change counts as material; the appointment of consultants and contractors; what is reported, how often and to whom; and how an issue escalates when the parties disagree. However the parties choose to record these decisions, keeping them in one place makes the project easier to run.
It should also be proportionate. A small project with two parties does not need the governance of a large one with five, and too much process can slow a development as surely as too little.
Planning the end at the start
Every joint development ends, whether through the sale of the finished asset, one party buying out the others, the expiry of a land right or a long hold with income shared. How and when that happens affects the design, the financing and the choice of partners, so it belongs in the first conversation rather than the last.
The start is also when responsibilities are settled, before anyone is committed. Who provides the site evidence, such as surveys, ground conditions and utility information, and who bears the cost if it reveals a problem? Who seeks each permission, and what happens if one is refused or delayed? Who may change the scope, and who absorbs the cost of a change? Who manages delivery and the contractors? And which commercial dependencies, such as an occupier's commitment, the finance or the timing of a land right, does the project rely on, and what happens if one of them fails? If the plan relies on selling units before completion, the project's escrow position becomes one of those dependencies; our guide sets out how the off-plan sale trigger for project escrow applies in Abu Dhabi.
The right structure for a given project is a legal, tax and commercial question, and each party should take its own advice. What we bring is a clear view of the development itself: what it needs, what it can support and what each contribution is worth to it.
Have a project that needs a partner?
Tell us what the project is and what each party brings.
Discuss a joint development