World Source Company B Project Value Of The Land Study

Obtaining land is the first step in real estate development, and also the key process toward successful. As the way to obtain land has changed, real estate companies can only obtain land by bidding, auction or spectacle.Large sum of money must be impropriated to obtain land, and it always account for 40% of the whole developing cost. Because there is always long time from obtaining land to at last the building be sold, any change in market and policy may greatly influence the project. If the economic condition is bad, the company must bear the loss of land depreciation. So it is important to study the market value of land before obtaining it. Thus we can avoid blindness in investment and cruelty competition for land.As the decision-making of land involves the whole process of real estate selling plan, it is very complex. This article tries to use project B of Shi-yuan Company as an example to discuss the decision-making process, and do some useful work for the future.According to the current policy, the land used for project B must be obtained by bidding, auction or spectacle. Shi-yuan Company must first evaluate the land value, and estimate the highest price the company can afford. The highest price can be gained by the method called supposing developed method. The principle of this method is: land value=real estate value - buildup value of house. For the buildup value of house is easy to decide comparatively, the key to decide land value is to decide the real estate value after the house being built up. By study the condition of land, planning limitation, character of the project, and company's strategy, Shi-yuan Company decides to build a 5A-classed office building in this area. After study macro-environment and micro-environment, company's strength and weakness, Shi-yuan company made SWOT analyze. Then Shi-yuan Company defines project B, and made it gist for programming and market oriental.The process to judge land value include: deciding the price of the product on the base of market oriental. The price should be decided according to the supply and demand condition of the market, the trends for long term, and product's potential appreciation ability. Land value is decided by cost analyzing and supposing developed method. The value of land thus gained is the criterion to compete against other opponents.