Risk and Investment

Angus P. J. McIntosh and Stephen G. Sykes

Chapter 14 in A Guide to Institutional Property Investment, 1985, pp 287-308 from Palgrave Macmillan

Abstract: Abstract The concept of risk in relation to property investment is generally only considered in the context of development situations. Even so, there can be few developers who seriously undertake risk analysis as a matter of course. Development appraisal models, like valuation models, tend to be simplistic and are rarely approached on a cash flow projection basis. ‘Residual valuation’ models ignore the explicit timing of payments (see Chapter 11). Whilst this can be quite useful for a first approach when a number of potential schemes must be rapidly assessed (and in many cases no detailed figures are available), the application of such models to realistically assess in detail the likely profitability of a scheme and associated problems must be regarded as seriously limited.

Keywords: Cash Flow; Capital Asset Price Model; Future Cash Flow; Capitalisation Rate; Investment Management (search for similar items in EconPapers)
Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-07154-8_14

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DOI: 10.1007/978-1-349-07154-8_14

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