Landowners in Dakar: unlocking the value of your land by partnering with a property developer
Own a plot of land in Dakar? Sale, land-for-apartments exchange, joint development: how to unlock the value of your land with a property developer.
Introduction
In Dakar, land is scarce and valuable. Many families own a plot, sometimes inherited, sometimes bought years ago, on which stands an old villa, an unfinished building or nothing at all. In neighbourhoods such as Fann, Point E, Mermoz, Ngor or the Almadies, these plots represent considerable potential that is often under-exploited.
Yet building a block of apartments yourself is a demanding undertaking: it requires studies, permits, substantial financing, reliable contractors, rigorous technical supervision and the ability to market the homes. Few landowners have all of these resources at their disposal.
Partnering with a property developer is a solution that lets you unlock the value of your land without shouldering all of these constraints alone. In this article, we present the main forms of partnership between landowners and developers, their advantages, and the points to watch before committing.
Why partner with a developer?
Turning land into productive assets
Vacant land or an old building often generates little income, or even costs money to maintain. A well-designed residential development can multiply the built floor area and create homes or commercial premises, which are sources of value for the landowner.
Benefiting from a professional's expertise
The developer brings expertise at every stage: designing the scheme with the architect, technical studies, obtaining permits, selecting and coordinating contractors, marketing, handover. The landowner benefits from this expertise without having to build it up themselves.
Limiting the financial effort
Depending on the formula chosen, the landowner can unlock the value of their land without having to finance the construction. It is the developer who raises the necessary funds, in particular through off-plan sales (VEFA, vente en l'état futur d'achèvement) and its own resources.
Resolving certain family situations
When a plot belongs to several heirs, a development project can sometimes make it easier to divide the estate: each heir can receive one or more apartments, or a share of the sale proceeds. Such situations do, however, require a clear agreement between all the rightful heirs and stakeholders.
The main forms of partnership
1. Selling the land to the developer
This is the simplest formula: the landowner sells the plot to the developer, who then builds the scheme on it. The landowner receives the agreed price and has no further involvement in the project. This option suits those who want cash quickly, without taking part in the operation.
2. Exchanging the land for apartments to be built
In this formula, often called a land-for-apartments exchange (dation), the landowner transfers the plot not in return for money, but in return for one or more units in the building to be constructed: apartments, commercial premises, parking spaces. A combination of units and a cash payment can also be arranged.
This solution allows the landowner to become the owner of brand-new units, which they can occupy, let or resell. It requires solid confidence in the developer's ability to see the project through to completion.
3. Joint development (co-promotion)
The landowner contributes the plot to a joint operation, for example through a dedicated company, and shares the results of the operation with the developer according to an agreed allocation key. This formula can be more profitable, but it also means sharing a portion of the risks.
4. Lease-based arrangements
In some cases, the landowner retains ownership of the land and grants the developer the right to build and operate for a long period, at the end of which the buildings may revert to them. These structures are rarer and more technical; they require specific legal support.
Comparing the formulas: which option for your objective?
Each formula meets different expectations. To help you find your bearings, here are the broad trends to keep in mind:
- If you need cash quickly or do not wish to follow a project over several years, selling the land is generally the simplest and most straightforward solution.
- If you want to build up or pass on property assets, exchanging the land for new apartments can be particularly attractive: you receive units that you can occupy, let or share among heirs.
- If you are prepared to share the risks in pursuit of a potentially greater return, joint development can be considered, with appropriate legal and financial support.
- If you are keen to retain ownership of the land over the long term, lease-based structures can be explored, bearing in mind their complexity.
There is no ideal formula in absolute terms. The right choice depends on your time horizon, your financial needs, the number of owners involved and your appetite for risk. An open discussion with the developer, supplemented by the advice of your notary, will allow you to compare the options on concrete grounds, based on the feasibility study of your land.
Finally, bear in mind that a property project also has a human and family dimension. Involving everyone concerned from the outset, explaining the stages and what each party receives in return, and recording decisions in writing will avoid many misunderstandings later on.
The prerequisites
A clear land-tenure situation
For a project to be built and financed, the legal status of the land must be clear. A plot with a land title (titre foncier) offers the greatest security and the fewest complications. If the land is held under a lease or another arrangement, preliminary regularisation steps may be necessary. Your notary is your first point of contact on this matter.
The agreement of all rightful heirs and stakeholders
When the land belongs to several people, particularly as part of an inheritance, the agreement of all co-owners or heirs is essential. An unsettled estate generally has to be finalised before any commitment is made.
The characteristics of the plot
The surface area, the shape of the plot, the width of the street frontage, access, the nature of the soil and the applicable planning rules (permitted height, building footprint, setbacks) determine what can be built. The developer carries out a feasibility study to assess the potential of the land.
The stages of a successful partnership
1. The first discussion
The landowner presents the plot and their expectations: selling, receiving apartments, taking part in the operation. The developer gathers the initial information: location, surface area, land documents.
2. The feasibility study
The developer analyses the plot, the planning rules and the market. It sketches out a possible scheme: number of storeys, types of homes, floor areas. This study makes it possible to assess the value of the land within the framework of the project.
3. The partnership proposal
On this basis, the developer puts forward a proposal: a purchase price, the number and type of units handed over in exchange, or an allocation key for a joint development. The landowner can examine it with their advisers.
4. Negotiation and contracts
The parties negotiate the terms: consideration, timetable, guarantees, conditions precedent (obtaining the building permit, for example), and what happens to the project in the event of difficulties. The agreement is formalised in deeds drawn up with the assistance of a notary and, if necessary, a lawyer.
5. Delivering the project
The developer obtains the permits, launches sales and construction, and keeps the landowner informed of progress. At handover, the landowner receives the units or the share due to them.
Points to watch
Choosing a reliable developer
This is the central question. Find out about the developer's track record, the progress of its current construction sites, its structure and its reputation. Visit its projects. A serious developer is happy for you to take the time to check.
Defining the consideration precisely
In the case of an exchange for apartments, the contract must describe the units handed over in precise terms: position in the building, floor areas, apartment types, level of finishes, parking spaces. The plans and the specification sheet (notice descriptive) must be attached as annexes.
Setting out deadlines and guarantees
The contract must set out a timetable, the legitimate grounds for delay and the mechanisms protecting the landowner if the project does not go ahead or is interrupted. Ask your notary about the guarantees that can be put in place.
Anticipating tax and costs
Each formula has different tax consequences and costs. Seek advice to choose the solution best suited to your situation.
Maintaining communication
A partnership runs over several years. Regular, transparent communication between the landowner and the developer is the best guarantee of a smooth relationship.
Which plots interest developers?
Location above all
Plots located in sought-after neighbourhoods, well served by transport and close to amenities, are of particular interest to developers. In Dakar, neighbourhoods such as Fann, Point E, Mermoz, Ngor or the Almadies are naturally attractive.
Development potential
A plot whose planning rules allow several storeys to be built offers more possibilities. Corner plots or plots with a wide frontage are often prized.
A sound legal position
A titled plot, free of disputes and with clearly identified owners, is much easier to develop.
The DKR Real Estate approach
DKR Real Estate develops residential and commercial schemes in Dakar and the surrounding area. Our projects under way and in preparation, such as Mykonos, Oceania in Ngor, or our projects in Fann and Point E, illustrate our ability to design and deliver buildings suited to each neighbourhood. We give careful consideration to proposals from landowners wishing to unlock the value of their land.
Conclusion
Owning land in Dakar is a valuable asset. Partnering with a developer allows you to turn it into productive assets, without bearing the complexity and financing of a property project alone. Sale, land-for-apartments exchange, joint development: each formula has its advantages, and the choice depends on your objectives, your family situation and your time horizon.
Do you own a plot in Dakar or the surrounding area and want to explore its potential? Contact DKR Real Estate: our team will study your land with you and present, in full transparency, the partnership options available.