Study On Risk Management Of Real Estate Development Project In Renovating The Old Town

Along with the continuous development of urban construction and economy, real estate development projects in renovating old town become quite common all over the country. Such projects will generally have to undergo several phases of demolition compensation, reconstruction and marketing operation, compared with general real estate development project, these projects have some specific characteristics, such as long development cycle, huge uncertainty and high risk. Therefore, risk management of real estate development project in renovating old town has important practical significance.In this dissertation, a comprehensive and systematic overview of researches on real estate risk management both at home and abroad are conducted firstly, among which the selection methods of schemes are focused to highlight the advantage of net present value (NPV)in estimating real estate development projects. Secondly, it analyzes the possible risks in various stages of real estate development projects in renovating old town, which may serve as the preparation for the decision-making and risk management. Then, based on comparison of the IRR and NPV, it points out the weaknesses of internal rate of return in estimating mutually exclusive programs and improves the current solution method of NPV. Next, differential method is used to solve the sensitivity coefficients of NPV to single-factor in order to help investors to determine the impact of uncertain factors on NPV, after which it used single-factor sensitivity coefficients to solve the change direction and magnitude of NPV in the present of joint change of multi-factors. Finally, it takes Tianjian Industrial Zone development project in Shenzhen Futian District for example, based on the analysis of market and the surrounding environment, it analyzes the sensitivity coefficient of several main risks to NPV with the improved NPV indicators as criterion of optimization.