Real Estate Project Investment Evaluation

This report takes a common residential investment project in Beijing as an example, on one hand it demonstrates and examines contents and functions of basic steps of an investment evaluation for real estate decisions through a real case study, on the other hand it discusses the market supply and demand level and cost and profit structure of the real estate investment project, evaluates the market result and financial result, and reflect the common situation in Beijing real estate investment market.Real estate project investment evaluation basically includes tow parts: market analysis and finance analysis. Market analysis includes study of macroeconomic environment, market supply and demand, submarket/neighborhoods and location, competition and consumer behaviors, it answers problems of market opportunities, product positioning and pricing, and sets the precondition of financial analysis. In this case, the project has favorite investment environment, the core competency comes from good neighborhood environment and convenient living facilities.Financial analysis begins with estimating of cash in flow and out flow, and then establishes financial statements such as cash flow statements and income statements. Finally it evaluates profitability and payback capability through static and dynamic analysis, and comments on overall financial performance. The estimated profitability and payback periods of the case project reach industry average level and reflect basic characteristics of real estate project investment: high profit margin, but long payback period.The case is an real example of real estate investment, it catches market opportunity by strategic market positioning and pricing, and it is expected to have reasonable good financial performance.