The Measurement Of The Basic Discount Rate In Commercial Real Estate

Currently, the commercial real estate develops rapidly in China. No matter economic evaluation of investment projects or second-hand housing transactions of commercial real estate, or the assessment of the value of commercial real estate, the benchmark discount rate are important parameters of the primary consideration. As an important part of the real estate market, the current market does not exist a benchmark discount rate for commercial real estate. Therefore, we consider it necessary to measure the benchmark discount rate of commercial real estate industry.This paper starts from the definition of the benchmark discount rate; analyzes its connotation, combined with the characteristics of the commercial real estate industry,analyzes the affecting factors of the benchmark discount rate and the principles when determining the benchmark discount rate. On this basis, this paper analyzes the common disadvantages of each method. Finally, we choose the F-F model as a way to strike the authority cost profit rate from the perspective of market and industry. The author selected the commercial real estate companies as a sample data; analyze multiple linear regression and correlation analysis of each parameter. Then, we calculate the authority cost profit rate. Finally, we combine the WACC model with Fama-French model to calculate the benchmark discount rate of commericial real estate.This paper chooses the F-F model as a way to strike the authority cost profit rate from the perspective of market and industry, and make a detailed analysis of how to select each parameter. What’s more, we Finally, we combine the WACC model withFama-French model to calculate the benchmark discount rate of commericial real estate.The final results prove the reliability of the method has a high reference value and practical significance.