Financial evaluation of real estate projects in China

Abstract

At the present time, the feasibility and evaluation of real estate projects in China is guided by the Methods and Parameters of Construction Projects Economic Evaluation, a document published by the National Planning Department and Construction Ministry. Real estate projects, however, have many distinguishing features, which set them apart from general industry construction projects. The use of financial statement forms, evaluation parameters, methods, and indices generally used in construction projects are not suited to real estate projects. This paper discusses several aspects of real estate projects in China in terms of investment and operations and demonstrates that more appropriate methods of evaluation are required.