Research Of Commercial Estate Development Project’s Cost Control

Along with the acceleration of urbanization process in China, real estate industry welcomes a rapid development. At present, the application of target cost management system is not only one of an effective means in the management of real estate development enterprises, but an important method of the implementation of the project cost control in advance. Target cost management is a rational activity which takes global cost of enterprises as the object, makes a strategy plan according to the overall development of enterprises and puts the satisfaction of customer as the guidance. At present, the target cost management of most real estate enterprises is still at continuous groping stage and many problems exist in the management in China. However, it focuses on practical methodology without theoretical induction in current research of target cost management. In other words, there is most of qualitative description without quantitative statistical research.Based on theoretical investigations with some questionnaire survey and depth interview of the target cost management, the paper summarizes the current status and the problems of target cost management at this stage and in addition to present the improvement approach. The paper also combines practice and theory through the research of real engineering cases.The core content of this paper mainly includes the following three parts: Firstly, the paper discusses basic current status of the target cost management process of real estate enterprises. It is a process which from real estate development project pricing to preparation, decomposition, execution and summary of target cost. Each process includes description and analysis as well as the evaluation of the professional on current status.Secondly, the paper discusses the main problems on the target cost management, namely, the understanding on target cost is not profound, the dynamic control on target cost is not strict enough, the process of the target cost management system is not perfect and the target cost is not accurate. And then the paper analyzes the causes and consequences of these problems in detail.Thirdly, the paper investigates the target cost management of real estate development enterprises, including the ideas of the principles and the basic requirements of the target cost management to the real estate development enterprises as well as the summary about the target cost management system model based on the value chain. Finally, this paper put forward to the improvement measures of target cost management according to the aspects of organizational and technical measures.