Study On Risk Management Of S Commercial Real Estate Investment Project

The commercial real estate (CRE) has been becoming a rapid-developed branch amongreal estate family for the nearly ten years, the successful development and effectivemanagement of it can largely improve national living level, prosper local economy andpromote the development of national economy and society. In recent years almost all largeand medium-sized cities of China accelerate the pace of building fully functional shoppingmall. However, the phenomena that many large commercial real estate projects had to transferof ownership or postpone the development time for capital chain rupture took place often inthe cities till2011followed by subprime crisis in2008. In the present case in China, thecommercial real estate investment (CREI) is badly in need of risk management. The purposeof the study is to establish a risk management index system and enact a quantified assessmentfor S commercial real estate, and hope it to be a good example to other commercial real estateinvestment. We used literature analysis and full consideration of the S’s facts to identify therisk factors in the whole development stages so as to establish a risk management indexsystem; then a quantified assessment was enacted by utilizing expert grading and hierarchyprocess analysis methods; finally several good suggestions and strategies were givendepended on the assessment results for S to avoid, transfer and mitigate risks. The resultsshowed that, for S commercial real estate project, the stage “Merchants and Operation” takesthe largest part among the first class of four indicators with38.2%, the other three stages“Project Decision”,“Project Preparation” and “Construction” respectively hold23.2%,24.3%and14.3%; In the third class of indicators,“Financing Risk” takes the maximum weight with12.89%, and the following three are “the Sales Staff Quality Risk” with12.81%,“InvestmentEstimate” with8.12%and “Location Choice” with6.32%. This study provides a preliminaryexample to other commercial real estate investment for risk management. Additionally, asuccessful merchants attracting and good enterprises settled may, to a great extent, do muchhelp to a CREI’S success; reliable financing, location choice and investment estimate etc. arealso important to a commercial project. So these factors should be key points which weconsider of to the risk management.