Analysis of the investment evaluation of the uncertain real estate project

Abstract

The economic quickly development in China has provided opportunities for the real estate project investment. The rise in the real estate project activity has caused an increase in competition in the Chinese market. By the investment evaluation, the investors can control the project more confident and increase the competition abilities. This study analyzes the sources of the real estate project uncertainties. Based on the traditional financial evaluation, the paper introduces the new Adjusted Cash Flow Method, adjusted Discount Rate Method and the real option theory to resolve the uncertainties. Finally, this paper draws a conclusion that the three methods above are more suitable than the traditional ones for the uncertain real estate project. © 2014 Springer-Verlag Berlin Heidelberg.