Research On The Value Of Urban Reform Project Based On Improved Real Option Model

Recently,with the development of social economy,the pace of urban development is also closely followed.The limited land resources make urban land increasingly "every inch of gold and every inch of land".For the development of the city economy and the construction of the overall style,the government and enterprises have begun to focus on the development of the city reform project.In 2018,Premier Li Keqiang stressed the need to increase government subsidies,introduce financial support policies,promote the construction of affordable housing and the renovation of villages in cities,and accelerate the process of urbanization.There are three kinds of subjects involved in the urban renewal project: the government,developers and village groups.This paper studies the developer-led urban renewal project.City reform projects have a long period of time,slow rate of fund recovery and high uncertainty.In reality,there are many cases of investment failure caused by developers' failure to make reasonable evaluation of project value and judgment on investment timing.Therefore,for developers,it is necessary to design an evaluation method that can reasonably estimate the project value.In order to avoid risks as much as possible in the fierce market competition environment,enterprises need to choose appropriate investment opportunities and seek development.At present,domestic real estate enterprises mainly use traditional evaluation methods for value evaluation.These evaluation methods do not take into account the irreversibility of investment,decision-making flexibility and the existence of flexible value in urban renewal projects,resulting in inaccurate estimation of project value.In view of this limitation,this paper proposes an improved real option model based on B-S model and fuzzy mathematics theory.The method takes into account the investment opportunities brought by various uncertain factors in the project development process,makes the evaluation results closer to the real value,improves the scientific nature of decision-making,and has certain practicability.Based on the analysis of the limitations of traditional evaluation methods,including market method,cost method,income method and hypothetical development method,this paper summarizes the applicability of real option method in the value evaluation of urban renewal projects.On the basis of the classical real option pricing model,combined with the characteristics of the urban renewal project,the relevant parameters in the model are improved,and the basic theory of fuzzy mathematics is introduced to build an improved B-S option model.Finally,taking a city renovation project in Xi 'an as an example,the real value of the project is calculated by substituting the actual value of the case into the model proposed in this paper.By comparing the different results calculated by NPV method and the improved B-S model proposed in this paper,it is proved that the evaluation results calculated by the fuzzy real option pricing method are more accurate,closer to the real value,and have advantages in investment timingdecision,providing value reference for real estate enterprises to choose the optimal investment timing.