With the Chinese real estate market’s significant growth, real estate developers face a growing range of opportunities and challenges. Managing with the right teams, systems, processes and structures are critical both to sustain and enhance the value of the companies.
Developers may mitigate their investment risks by putting in place control processes such as:
- evaluation models to support real estate investment decisions
- analysis to determine the optimal structure of the investment and the nature of the entities to be established
- assurance work on the financial strength and commitment of partners in real estate joint ventures
- establishing the availability and cost of refinancing upon the expiry of mortgages
- projections of cash flow demand according to certain significant obligations, including property taxes, maintenance costs, mortgage payment, insurance costs and related charges regardless of whether or not a property is producing sufficient income to pay such expenses
- establishing efficient and effective processes for smooth operation
- producing timely, good quality financial reports to stakeholders, including: the board of directors, business partners, and regulatory authorities.