Application of Real Option Approach in Multi-period Investment Decision of Real Estate Development

摘要

Through analysis of basic assumptions and limitations of the conventional real estate investment decision method, in this paper, it s unconformity to the investment environment, which includes a great number of uncertain elements, is pointed out. By analyzing the real option and the price formula, the pattern of real option in real estate investment decision is put forward and this breaks through the limitations of the conventional investment decision method and makes the decision scientifically and reasonably, moreover, it has some directive significance to investment administration work of Real Estate Corporation. Based on the real option character in the real estate investment decision ,this paper measured the real estate investment value brought by the multi-period investment strategy in comparison with the single-period investment strategy and analyzed the character of the multi-period real estate investment model. At the end we used a case in order to validate the option value of multi-period real estate investment.