UM  > 工商管理學院
Sale before completion of development: Pricing and strategy
Lai, R.N.1; Wang, K.2; Zhou, Y.3
Conference NameConference on Commercial Property
Conference DateAUG, 2003
Conference PlaceIsl Skye, SCOTLAND

The paper examines the risk-and-return characteristics of a popular development strategy, the presale system (or sale before completion), used in many Asian cities. We model a presale decision in a real-options framework and suggest that the use of presale is primarily for a risk-sharing purpose. That is, developers can reduce bankruptcy and marketing risks by selling (or leasing) their projects before their completion dates. Our model also indicates that, because of the presale system, there is a barrier for new developers to enter into a market, which helps explain the anecdotal observation that most real estate markets in Asian cities are oligopolistic in nature and dominated by large developers.

KeywordCompound Options Redevelopment Risk Land Prices Real Assets Valuation
Indexed BySSCI ; SSCI ; CPCI
WOS Research AreaBusiness & Economics ; Urban Studies
WOS SubjectBusiness, Finance ; Economics ; Urban Studies
WOS IDWOS:000221701100007
Fulltext Access
Citation statistics
Cited Times [WOS]:44   [WOS Record]     [Related Records in WOS]
Document TypeConference paper
CollectionFaculty of Business Administration
Affiliation1.Faculty of Business Administration, University of Macau, Taipa, Macau, Macau
2.Department of Finance, California Stt. University-Fullerton, Fullerton, CA, United States
3.Department of Finance, Chinese University of Hong Kong, HKSAR, Hong Kong
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Lai, R.N.,Wang, K.,Zhou, Y.. Sale before completion of development: Pricing and strategy[C]:BLACKWELL PUBLISHERS,2004:329-357.
Files in This Item:
There are no files associated with this item.
Related Services
Recommend this item
Usage statistics
Export to Endnote
Google Scholar
Similar articles in Google Scholar
[Lai, R.N.]'s Articles
[Wang, K.]'s Articles
[Zhou, Y.]'s Articles
Baidu academic
Similar articles in Baidu academic
[Lai, R.N.]'s Articles
[Wang, K.]'s Articles
[Zhou, Y.]'s Articles
Bing Scholar
Similar articles in Bing Scholar
[Lai, R.N.]'s Articles
[Wang, K.]'s Articles
[Zhou, Y.]'s Articles
Terms of Use
No data!
Social Bookmark/Share
All comments (0)
No comment.

Items in the repository are protected by copyright, with all rights reserved, unless otherwise indicated.