Scarcity of land and lack of a clear land title is prompting builders to develop projects in joint venture with landowners. In lieu of their land, the landowners get a certain percentage (ranging from 30-50%, depending upon the location, cost of land and kind of project) of either the sales realization or the saleable area.
Most big developers across the country are adopting this route to develop townships as this gives them a clear land on a platter (without having to buy it) and saves them the time to do another outlay. Says Anurag Verma, senior GM (marketing), Ansal Buildwell Ltd, which has launched such joint venture townships at Moradabad, Faridabad, Jhansi and Gwalior, ?instead of identifying land, if we just have to design and plan the project, it not only saves time, but also a lot of money. On the part of the landlord, he gets an expert hand to develop his land. The percentage of sales proceeds or saleable area that he gets after the project is developed is also a big incentive for him.?
The concept has been in vogue in south India since the past decade under the name of joint development arrangement. ?Under this arrangement, the landlord usually gets around 34% of the saleable area in lieu of his land. 12% of our total land bank comprises such joint ventures,? says Ashish Puravankara, director, Puravankara Projects Ltd.
Contrary to what people think, such land is usually located strategically and is very much within the urbanized and municipal limits of a city.
?Though purchasing land outright is the best possible way as we have the leverage to develop it as and when we like. However, with there always being a big question mark on the clarity of land titles, it is better to tie-up with the landlord and then develop a project,? says Purvankara.