A study on risk management to prospect of project profit from 'appropriate size' redevelopment project

Abstract

After the 1991 land price bubble collapse, many statutory redevelopment projects had been forced not to complete by mainly the shrink of the floor demands or the difficulty of the floor demand forecasts. Then, the 'appropriate size' redevelopment style was advocated that prefers the matching the areal floor demands to intensive landuse and that emphasizes the delay costs by the project period. This style can be interpreted as reduction of the business profitability risk. The purpose of this article is first to report Nayabashi East project as thistypical case, to explain the effects on the risk management of the 'appropriate size' and to illustrate the effects through Monte Carlo risk simulations of a simplified model.As the results, we conclude that this project had succeeded to get out of the red by the change of urban planning decision. We also refer on an artificial society approach as its further work.