Risk management processes used in determining project feasibility in the property development process early stages by Australia/New Zealand property developers

IF 1.6 Q3 BUSINESS, FINANCE Journal of Property Investment & Finance Pub Date : 2021-12-14 DOI:10.1108/jpif-08-2021-0071
Matthew Moorhead, L. Armitage, M. Skitmore
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引用次数: 1

Abstract

PurposeThe purpose is to examine the risk management processes and methods used in determining project feasibility in the early stages of the property development process by Australia/New Zealand property developers, including Monte Carlo simulation, Bayesian models and real option theory embedded in long-term property development and investment decision-making as instruments for providing flexibility and managing risk, uncertainty and change.Design/methodology/approachA questionnaire survey of 225 Australian and New Zealand trader developers, development managers, investors, valuers, fund managers and government/charities/other relating to Australia/New Zealand property development companies' decision-making processes in the early stages of the development process prior to site acquisition or project commencement – the methods used and confidence in their organisations' ability to both identify and manage the risks involved.FindingsFew of the organisations sampled use sophisticated methods; those organisations that are more likely to use such methods for conducting risk analysis include development organisations that undertake large projects, use more risk analysis methods and have more layers in their project approval process. Decision-makers have a high level of confidence in their organisation's ability to both identify and manage the risks involved, although this is not mirrored in their actual risk management processes. Although the majority of property developers have a risk management plan, less than half have implemented it, and a third need improvement.Practical implicationsProperty development organisations should incorporate more modern and sophisticated models of risk analysis to determine the uncertainty of, and risk in, a change of input variables in their financial viability appraisals. Practical application includes using such multiple techniques as what-if scenarios and probability analysis into feasibility processes and utilise these specific techniques in the pre-acquisition stages of the property development process and, specifically, in the site acquisition process to support decision-making, including a live risk register and catalogue of risks, including identification of and plans for mitigation of project risks, as a form of risk management.Originality/valueFirst study to examine the extent of the decision-making methods used by property developers in the pre-acquisition stage of the development process.
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澳大利亚/新西兰房地产开发商在房地产开发过程的早期阶段用于确定项目可行性的风险管理流程
目的:目的是研究澳大利亚/新西兰房地产开发商在房地产开发过程的早期阶段确定项目可行性所使用的风险管理过程和方法,包括蒙特卡罗模拟、贝叶斯模型和长期房地产开发和投资决策中嵌入的实物期权理论,作为提供灵活性和管理风险、不确定性和变化的工具。设计/方法/方法对225名澳大利亚和新西兰的贸易商开发商、开发经理、投资者、估价师、基金经理和政府/慈善机构/其他与澳大利亚/新西兰房地产开发公司在土地收购或项目开始之前的开发过程的早期阶段的决策过程有关的人进行问卷调查-所使用的方法和对其组织识别和管理所涉及风险的能力的信心。调查结果抽样调查的组织中很少使用复杂的方法;那些更有可能使用这种方法进行风险分析的组织包括承担大型项目的开发组织,使用更多的风险分析方法,在项目审批过程中有更多的层次。决策者对其组织识别和管理所涉及的风险的能力有很高的信心,尽管这并没有反映在他们实际的风险管理过程中。尽管大多数房地产开发商都有风险管理计划,但只有不到一半的开发商实施了风险管理计划,三分之一的开发商需要改进。实际意义房地产开发机构应采用更现代和复杂的风险分析模型,以确定其财务可行性评估中输入变量变化的不确定性和风险。实际应用包括在可行性过程中使用多种技术,如假设情景和概率分析,并在房地产开发过程的收购前阶段,特别是在场地收购过程中利用这些具体技术来支持决策,包括实时风险登记册和风险目录,包括识别和减轻项目风险的计划,作为风险管理的一种形式。原创性/价值优先研究考察房地产开发商在开发过程的收购前阶段使用的决策方法的程度。
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来源期刊
CiteScore
3.50
自引率
23.10%
发文量
33
期刊介绍: Fully refereed papers on practice and methodology in the UK, continental Western Europe, emerging markets of Eastern Europe, China, Australasia, Africa and the USA, in the following areas: ■Academic papers on the latest research, thinking and developments ■Law reports assessing new legislation ■Market data for a comprehensive review of current research ■Practice papers - a forum for the exchange of ideas and experiences
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