Investments on urban land valuation by real options – The Portuguese case
| Autor: | Gualter Couto, Dulce Martins, Pedro Pimentel, Rui Alexandre Castanho |
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| Rok vydání: | 2021 |
| Předmět: |
Natural resource economics
Geography Planning and Development 0211 other engineering and technologies 021107 urban & regional planning Forestry Time horizon Real estate 02 engineering and technology 010501 environmental sciences Management Monitoring Policy and Law Investment (macroeconomics) 01 natural sciences Variable (computer science) Urban planning Value (economics) Business Deferral 0105 earth and related environmental sciences Nature and Landscape Conservation Valuation (finance) |
| Zdroj: | Land Use Policy. 107:105484 |
| ISSN: | 0264-8377 |
| DOI: | 10.1016/j.landusepol.2021.105484 |
| Popis: | This study aims to evaluate unexploited urban land in Portugal, for the construction of new apartments, with the real options analysis's contribution, using the Quigg model, adapted to the reality of the Portuguese market. This work defines a value associated with the land, referring to the construction option. This option gives the right, but not the obligation, to build the project at any time. Therefore, the new land value is maximized in the optimal timing to define the best moment to carry out the investment. The study shows that in the Portuguese case, when the time horizon changes from 5 to 10 years, both the value of the deferral options and the global value of the land increase considerably, exposing the deferral options' sensitivity to the time horizon variable in the process of evaluation. Besides, considering the land evaluation process in Portugal, it is possible to conclude that, on average, the deferral option represents 9,09% of the land's final value, varying between 1,40% and 20,10%. The decision to defer the construction of the investment project adds value to the undeveloped land and should be considered in the investment decision-making process. |
| Databáze: | OpenAIRE |
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