The Investment Decision Research Of "Blue Shield International" Commercial Real Estate Project Based On Real Options

Abstract:Commercial real estate in China is developing rapidly in recent years, and as a high investment and high risk project, the correctness of the investment decision has become the basis for the success of the project. It has characteristic of long investment cycle, investment irreversibility, and generally long investment scale,and the investment process is fraught with uncertainties. Face the investment environment of many uncertainty factors, investment decision theory in traditional practice has exposed the theory defects, which can not reflect the potential value of the project, thus it can not accurately evaluate the project.Based on the theory of real option, we construct the delay real option of "Blue Shield International" commercial real estate project, and research the project’s investment decision. The main research work is reflected in the following aspects:(1) The paper analyzes the investment decision-making theory of Commercial real estate systematically, pointing out the limitations and shortcomings of traditional methods and real options method investment decisions advantage in investment decision.(2) The "Blue Shield International" commercial real estate project is introduced, the paper thinks that the main factor of influencing the investment decision of commercial real estate has irreversibility, uncertainty of the external environment condition and flexibility of decision based on the uncertainty of the project. It analyzes the commercial real estate project’s characteristics of real option and types of real option, and then build the development process.(3) The "Blue Shield International" commercial real estate project is introduced, the paper thinks that the main factor of influencing the investment decision of commercial real estate has irreversibility, uncertainty of the external environment condition and flexibility of decision based on the uncertainty of the project. It analyzes the commercial real estate project’s characteristics of real option and types of real option, and then build the development process.