Environments by Design

Abstract

During economically challenging times, architects find it difficult to secure commissioned projects to keep their office afloat and as a result have to either take the difficult choice of downsizing or looking into alternative sources of revenue. Joint venture development projects, either with contractors or with developers, is an alternative source of income. This option could sound like a dangerous path to follow but if conducted with a proper understanding of both party’s expectation, it can achieve winning results. 

By carefully analyzing a case study of a joint venture project in Dubai, UAE between an architectural company and a luxury-developer on the Palm Jumeriah which was designed, built and sold in the midst of the 2008-11 financial crises, this paper aims to better understand the challenges and advantages of such projects. By carefully analyzing the case study of the project on Palm Jumeirah, this paper aims to respond to a series of questions that predominantly most architects pursuing the option of a joint venture question and hesitate about. A few of the question are: is a joint venture an affordable option for architects or not? How can an architect secure a cash flow during joint venture project? What is the best way to assess the financial credibility of a development project? How should the profit be divided? How clear should the division of responsibilities be made and at what stage of the project should that happen? What kind of formal agreement should exist between the different parties in joint ventures? 

Even though there are no guarantees in any business, let alone a joint venture development project, having a better understanding of the possible pit-holes and challenges will help increase the percentage of success both in the projects and in the survival of an architect during challenging economical times.