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Property Joint Ventures
Our property joint ventures experience over the past 20 years provides you with an edge in the market by achieving funding objectives, quickly and effectively. We will provide you with the best property joint venture terms available at the time of applying.
A property developer’s ability to acquire new projects directly relates to the amount of equity/cash the developer is required to contribute to the project. Through prudent financial structuring Prudential Finance can maximise a developer’s debt gearing to free up capital for the next project.
Property joint ventures solve a shortage of equity in the property development and allows the project to proceed forward.
Due to the increases in construction costs, builders going under and projects forced to restructure debt. Property joint ventures are a potential solution and viable way forward.
For another finance structure to top up equity, see our Mezzanine Finance page.
Q&A
A property joint venture is a partnership between two or more parties to complete a property project, typically combining one party's capital with another party's development expertise and project opportunity.
The are no set guidelines for property joint ventures. We risk rate our investment into the project and provide terms accordingly.
Interest is capitalised due the term of the loan and therefore no repayments are required during the construction period.
Prudential Finance introduces capital partners or contributes its own network's capital to joint venture with an experienced developer, sharing project risk, equity and profits according to an agreed deed.
Joint ventures suit residential apartments, townhouses, land subdivision, commercial developments and mixed-use projects where the developer lacks sufficient cash equity but has a strong site, feasibility and execution track record.
Developer contribution varies. Some joint ventures require the developer to contribute the site, DA or a cash component. Others rely entirely on the developer's expertise and project management with capital provided by the partner.
Profit share is negotiated per deal and typically reflects the relative contribution of capital, site, approvals and management. A common structure includes a preferred return to capital followed by a split of residual profit.
Joint ventures are typically considered for projects with end values from $10 million to $500 million or more, though smaller strategic projects may be considered.
Security arrangements vary. Some joint ventures include registered mortgages or shareholder loans; others rely on shareholder agreements and reserve matters to protect capital partners.
Joint venture terms typically match the project timeline, generally 18 to 36 months from site acquisition to settlement of the final unit or completion of exit.
Cost overrun scenarios are pre-agreed in the joint venture deed, specifying who funds cost overruns, the effect on profit share and escalation procedures. Robust feasibilities and contingency allowances reduce overrun risk.
Yes. Joint ventures are considered on projects across all capital cities and selected regional centres including Melbourne, Brisbane, Perth, Adelaide, Gold Coast, Sunshine Coast and Newcastle.
Developers can submit a concise project summary including site details, feasibility, DA status, proposed structure and team experience to Hello@pru.com.au or 1300 550 669 for a confidential assessment.