Cooperation Scheme – Joint Venture land injection (inbreng)

Land Advantage
Developer
Owner Safer for developer since the land title will be under the JV
company name

Land Working
Disadvantage
(inbreng) Capital
To have a larger share in the JV Company, the developer shall
inject capital more than the value of the land, otherwise the
JV developer share proportion in the JV will be small.
Company

1. Land value is based on agreement between land owner and developer (can be based on independent appraisal)
2. The land owner shall inject the land and converted into share in the JV. (inbreng)
3. The developer will contribute the working capital based on requirements. (can be in several phase)
4. The equity ratio will be based on the value of capital injected by each party.
Cooperation Scheme – Joint operation

Land
Developer Customer
Owner

Provide develop
land Joint
JO
Account

Revenue Sharing
Land Owner scope Developer scope &
& responsibility responsibility Land Owner Developer
1. Provide land 1. Develop infra of
free & clear the land Land xx% Land xx%
2. All the land tax 2. Sales & Building xx% Building xx%
shall be paid Marketing
3. etc. 3. etc.

1. The land owner and developer will enter into Joint Operation
agreement which all the scope and responsibility shall be stipulated
in the agreement.
2. Usually, developer will take care all the development and
operational of the JO (Sales, admin, construction, design, etc.). The
land owner only involve in the Sale and Purchase agreement with
the customer (AJB) when the house unit sold since the land title still
under the name of Land Owner.
3. Revenue sharing percentage / value will be agreed in the beginning
when JO agreement is signed.
Advantages
• Developer does not need a big capital in the beginning.
• Revenue sharing percentage does not need to follow the capital
contribution by each party (can be based on agreement between the
party)
Disadvantages
• If the project canceled, developer will take a risk because the
development is above the land title under the name of the land
owner.