Why joint venture projects are a growing trend in the construction industry
Dan Hall, Senior Surveyor at Rund Partnership shares his thoughts on how joint venture partnerships can create long-term opportunities for multiple organisations.
“With current market conditions putting financial uncertainties at an all-time high, the prospect of a joint venture partnership in construction has never been more attractive.
“In brief, joint venture projects involve a commercial partnership between two or more separate parties. Each party contributes different resources and expertise, in return for a share of profits.
The benefits of joint venture projects
“There are many benefits involved in joint venture projects. For instance, each party involved can provide its individual expertise and resources. Housing associations, for example, have access to different low-cost funding streams which can benefit affordable housing projects.
“Another advantage of joint venture projects is that responsibilities and costs are shared between parties, so large-scale schemes become more achievable. Overall, trust is built between parties and key relationships formed, creating future opportunities for everyone involved.
The importance of Joint Venture Supervisors
“Alongside the benefits, a key consideration is that different parties may have different goals when approaching a project. Therefore, business objectives and ways of working need to align to produce the best possible outcome for everyone involved. Investing in a Joint Venture Supervisor is essential for ensuring all parties can mutually benefit from a project and objectives are met.
“The key aspect of a Joint Venture Supervisor’s role is to measure a project’s performance against a business plan, identifying any potential divergences from that plan and ensuring each member’s interests are protected. Typically, the Joint Venture Supervisor will have a range of responsibilities, including attending project board meetings to feed into key discussions and decisions, on site monitoring of the compliance of the works and certifying progress against a drawdown schedule. In addition, the Joint Venture Supervisor will prepare monthly reports to review costs against budget, comment on the certification process and on project progress, including any foreseeable risks.
Case study example: Pease Pottage
“An example of a current joint venture project is the Pease Pottage scheme in West Sussex, where Rund is working with developer Thakeham and housing provider Radian in a joint venture involving the development of more than 600 new homes. As part of our Joint Venture Supervisor role, we have a proactive ‘early warning system’ in place which anticipates potential issues that may affect project delivery, ensuring that there is better informed decision-making as a result. In addition to providing independent and impartial assessment and advice, we are also working with the delivery team and contributing enhanced risk, financial and quality management.”
Peter Youll, Group Commercial Director at Thakeham adds: “Our joint venture with Radian on Pease Pottage has given us the opportunity to bring our shared vision to life. Both of our organisations share similar values and have a passion for creating thriving new communities. Together with Rund’s Joint Venture Supervisor services, we have been able to combine our extensive skills and expertise and look forward to delivering a high-quality development in West Sussex.”
Investing in expertise for joint venture projects
Dan Hall continues: “When it comes to considering investment in a Joint Venture Supervisor, it is vital to work with a consultancy which offers significant contractual and commercial expertise. This will help provide the best advice, as well as strong leadership skills to deliver joint venture developments that benefit all partners.”
For information on how Rund can support your Joint Venture project, please contact Dan Hall at email@example.com.