Analysis of Risk of Commercial Real Estate Based on Multiple Attribute Group Decision-Making

Abstract

Abstract: Commercial real estate is the real estate primarily used for commercial. This paper proposes using the multi-attribute group decision method to identifying the risks of commercial real estate. By calculating the weight of each risk attributes to reflect the degree of influence of different decision makers and risks on the results,and to deduce the degree of similarity and diversity of each decision makers. It introduces the concept of entropy to calculate the weight of each risk attributes, infer the integrated decision-making value of very risk factors, and arrange every risk in order. Finally, it identifies the feasibility. Introduction Commercial real estates are real estates for commercial purposes classified according to use. They include retail shops, supermarkets, community business, commercial plazas, shopping malls and so on. Compared with residential real estate, commercial real estate has larger profits. However, high profits always accompanied with high risk. Developers can obtain the value of compensation and benefits after sold residential real estate, while the payback periods of commercial real estates are longer, even extended to the entire project duration, and are affected by various factors. The risks of commercial real estate including policy risk, funding risk, operational risk, urban planning risk, technology risk, natural risk, market supply and demand risk, capital risk and so on. Previous studies based mainly on qualitative research[1-3], but quantitative analysis of risk identification is less. Based on this, this paper proposes a method of multiple attribute group decision.