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Joint Venture Property Profit Share

JV property structures typically run a pref-and-promote waterfall: investor receives pref to a target IRR, surplus profit splits 50/50 or 60/40 in favour of investor, then a higher promote tier above a hurdle. Standard vehicle is an SPV LLP or SPC company.

Waterfall example

  1. Tier 1: investor receives 100 percent of cash until invested capital + 10 percent pref returned.
  2. Tier 2: 50 / 50 split between investor and developer until investor reaches 15 percent IRR.
  3. Tier 3: 30 / 70 split (investor / developer) above 15 percent IRR.

Land-owner JV

Land-owner contributes site at agreed market value (often a discounted residual). Developer contributes equity, finance arrangement and execution. Split typically 35 to 50 percent to land-owner depending on contribution.

Structure

  • SPV LLP: pass-through tax, two-member partnership.
  • SPV Ltd: ring-fenced, CT-paying, easier to onboard new investors.
  • JV Co + Holdco: investor sits in Holdco, developer takes promote in JV Co.
RICS Valuation Global Standards (Red Book)· Effective 31 Jan 2025Appraisal model reviewed by Oliver Wakefield-Smith (data integrity) with chartered-surveyor (MRICS) and CTA tax review. No affiliate links.