With the in-depth development of China's reform and opening up and the continuous improvement of the market economy system, commercial real estate, as the main business place of the commercial economy, has developed rapidly. However, due to its own particularity and other external environmental factors, there are huge investment risks in the development, management and operation of commercial real estate. This paper first gives an overview of commercial real estate, and then on the basis of discussing the risk categories of commercial real estate investment, puts forward the risk prevention strategies of commercial real estate investment, so as to identify, evaluate and prevent the investment risks of commercial real estate as much as possible and increase the profits of real estate enterprises.

Keywords: commercial real estate; Investment risk; Preventive strategy

I. Overview of Commercial Real Estate

(A) the concept of commercial real estate

Real estate can be divided into residential real estate, industrial real estate and commercial real estate by use. As the name implies, commercial real estate is mainly used for commercial operations, including various retail, wholesale, leisure, catering, entertainment and other business purposes. There are various forms of commercial real estate, mainly including wholesale markets, shopping centers, professional markets, brand stores, hotels, leisure commercial real estate and ground-floor residential shops. Industrial parks are generally not classified as commercial real estate.

(B) the development of commercial real estate in China

With the rapid development of the whole real estate industry, the commercial real estate in China has gradually developed. Before 1998, the development of commercial real estate was slow due to the influence of national policies, market environment and other factors. Representative commercial real estate construction projects include Tianhe City in Guangzhou, New Century Center in Beijing and Oriental Plaza. After 1990, especially since the beginning of 2 1 century, with the deepening of reform and opening up and the continuous improvement of the market economic system, commercial real estate has entered a period of rapid development, especially the completed area of commercial real estate has continued to grow rapidly.

However, with the rapid development of commercial real estate, its investment risks are constantly emerging, which has become the main threat to the survival and development of real estate enterprises. The management of commercial real estate in China is still in the primary stage of development, and the development mode is mainly "divided sales and after-sales charter". After the construction is completed, all or part of the divided pavement property rights will be sold. However, relevant statistics show that the sales area of commercial real estate only accounts for 50-60% of the completed area, and a large number of properties for sale are vacant, which leads to a high vacancy rate of commercial real estate and a huge investment of real estate development enterprises.

Two. Risk categories of commercial real estate investment

Political risk

1 policy risk

Policy risk is the loss of economic benefits caused by the expected changes of national policies on the development of commercial real estate. As the most important fixed assets investment of a country, the real estate industry is closely related to the country's macroeconomic policies. The state will adjust the macro-economic operation through the adjustment of real estate-related policies, including industrial policies, land policies and tax policies. For example, in terms of industrial policies, in recent years, the state has successively issued policies to encourage and support the construction of affordable housing and low-rent housing, which will inevitably change the internal structure of the real estate industry, and a large amount of funds will be invested in the construction of affordable housing and low-rent housing supported by state policies, which will affect the development of commercial real estate to a certain extent.

2. Urban planning risks

Due to the imperfection of urban planning in China and the pursuit of political achievements and image projects by some local governments, the layout of commercial real estate in some cities in China is unreasonable and overheated in recent years. According to statistics, up to now, there are more than 3,000 commercial streets in cities above the county level, and the explicit vacancy rate of new commercial streets in some prefecture-level and county-level cities has reached 15%, and the implicit vacancy rate has exceeded 20%. On the other hand, the construction and operation cycle of commercial real estate is long. During this period, changes in urban planning will lead to the complete bankruptcy of the project, and most of the construction costs cannot be recovered, so many projects can only be abandoned.

Economic risk

1. Market supply and demand risk

The market supply and demand risk of commercial real estate is the risk brought by the imbalance of market supply and demand. Mainly manifested in the following two aspects: First, the oversupply of commercial real estate leads to a large number of vacant real estate. The main reason is that with the rapid development of China's real estate industry in recent years, driven by interests, a large amount of money has been invested in the real estate industry, and the scale of commercial real estate construction has grown rapidly, which has exceeded the level of social and economic development and the level of residents' consumption. On the other hand, the completed commercial real estate projects can not meet the requirements of the market, and the structural contradictions of the market are prominent. The completed commercial real estate projects do not meet the needs of merchants in terms of location, scale and structure, and cannot meet the business requirements of merchants. The reason for this kind of risk is that developers have not realized a perfect business plan and developed projects according to market demand, but irrationally developed first and then invited investment, which will inevitably lead to prominent structural contradictions in the market, and serious market supply and demand risks will directly lead to economic losses of real estate enterprises.

2. Financing risk

The financing risk of commercial real estate is mainly interest rate risk, that is, the risk brought by the change of bank loan interest rate to real estate enterprises. Due to the imperfect development of China's current capital market and the influence of traditional investment concepts, real estate enterprises are restricted to use direct financing methods such as stocks and bonds, and can only borrow a lot from banks. According to statistics, among the real estate enterprises in China, most enterprises depend on bank credit for about 70%-80%. For commercial real estate projects, the payback period of project funds is longer than that of residential real estate, so it is more affected by interest rate changes. Interest rate is an important indicator for the state to regulate macro-economy. From 200 1 to 2008, the state adjusted the loan interest rate for more than five years as many as 18 times (as shown in figure 1). In 2007 alone, the interest rate was raised six times, with the cumulative increase exceeding 10%, which will greatly increase the financing cost of huge loan production enterprises.

(C) the risk of the developer's own operating ability

Commercial real estate industry spans two fields: real estate industry and commercial operation. Effective business management should be carried out not only in the later stage of business management, but also in the early stage of construction and development, and effective investment promotion activities should be carried out. However, most commercial real estate enterprises in China are mainly residential real estate, lacking talents and experience in commercial operation and management, applying the development model of residential real estate, failing to carry out effective business planning and investment promotion activities, and directly selling or renting out property rights after the project is completed. Although the sale of property rights can quickly withdraw funds, the cash flow is interrupted, which is not in line with the original intention of commercial real estate construction and the maximization of enterprise benefits; Due to the lack of commercial operation experience, the management of commercial real estate rental is chaotic, which is easy to stimulate contradictions with merchants and seriously affect the interests of enterprises.

Third, commercial real estate investment risk prevention strategy

(a) in line with national policies and the overall urban planning, to avoid political risks.

Real estate enterprises should always pay attention to the changes of national macro policies, including industrial policies, land policies, tax policies, etc., and rationally adjust the business content, management methods and location selection according to policies. For example, we can make use of the preferential tax policies for the construction of commercial real estate in urban high-tech zones to adjust the site selection of enterprise construction projects in order to obtain tax incentives.

As mentioned above, the risks of urban planning have a great impact on enterprises. Therefore, real estate enterprises should not only conform to the urban development plan before the new project starts, but also determine the location, positioning, scale and grade of commercial real estate projects according to the urban development plan, do a full market survey, and conduct a comprehensive investigation and study on the people flow, competition, surrounding business environment and traffic conditions in the project area. If the survey results show that the urban planning is unreasonable, it is unprofitable for enterprises to develop commercial real estate projects.

(2) Strengthen the control of market supply and demand risks and financing risks.

1. Avoid market supply and demand risks according to market demand.

In view of the two reasons of supply and demand risks in the commercial real estate market, we should do the following two things well. First, according to market demand, reasonably arrange the construction scale and type. Due to the long construction and operation time of commercial real estate, the above arrangement should be forward-looking on the basis of full investigation and reasonable prediction. For example, due to the adjustment of national policies, a large number of affordable housing and low-rent housing will be built in the next few years, which will inevitably have an impact on commercial real estate. Therefore, it is necessary to appropriately reduce the construction of commercial real estate to avoid the risk of oversupply. On the other hand, the key to the success of commercial real estate projects lies in the effect of later commercial management and operation, which depends on whether there is a perfect business plan before the project development. Only by carefully planning the project site selection, business orientation and project design, and building according to the business format and location requirements of the merchants, can the later management and operation be carried out smoothly, and the merchants can realize their expected economic benefits, which not only avoids the conflict with the merchants, but also obtains greater profits from the appreciation of the real estate.

2. Expand financing channels and guard against financing risks.

In order to prevent the cost increase caused by interest rate changes in financing risks, on the one hand, the project cost can be locked through fixed interest rate loans, but the fundamental solution lies in vigorously exploring financing channels, increasing the proportion of self-owned funds and enhancing the ability of enterprises to resist risks. It is necessary to improve the corporate governance structure, strive for listing financing or issuing corporate bonds, and introduce foreign capital to expand the proportion of foreign capital in the total capital of enterprises. Through the above measures, we can reduce the dependence on bank loans, not only effectively prevent the risk of loan interest rate, but also improve the management level of enterprises through listing or introducing foreign capital, and learn from the advanced experience of foreign real estate enterprises to promote the long-term development of enterprises.

(three) to strengthen the management and operation of commercial real estate, to prevent the risk of developers' own business ability.

The biggest difference between the development of commercial real estate and other types of real estate lies in the management and operation stage after the completion of the project. Because the project cost compensation and profit acquisition are realized at this stage, the management and operation stage has become a crucial stage in the development of commercial real estate. Studying many domestic commercial real estate projects, we can find that the failure of development projects mostly stems from the lack or immaturity of commercial management and operation. In the development of commercial real estate, the following strategies can be considered to prevent the risk of the developer's own operating ability.

1. Establish the concept of management and operation of real estate enterprises.

The completion of commercial real estate construction project is the basis of commercial operation management, not the end of the whole project. The value-added of commercial real estate depends on the later commercial management and operation, not just the sale of property rights. Therefore, domestic real estate enterprises should change the business model of applying residential real estate, establish the concept of real estate business management and operation, and precipitate it into real estate projects through effective business management and operation after the project is completed.

2. Increase the talent pool and improve management and operation.

The management and operation of commercial real estate involves real estate development and commercial operation, and talents with professional knowledge and practical experience in these two fields are needed to carry out reasonable commercial planning and investment promotion activities of the project. Real estate enterprises can unite with universities, design training programs according to the quality requirements of enterprises for managers, and cultivate the talents needed by enterprises.

3. Unify business themes and establish business brands.

A commercial real estate project will have various formats. The essence of modern commercial real estate management is to unify loose business units and various formats into a commercial theme, and finally establish a commercial brand recognized by consumers. According to the consumption level, consumption structure, consumption environment and project operation scale of each region, through the unified investment promotion and property management of merchants in the project, the accurate positioning of project operation can be realized, and the advantages of integration can be brought into play to avoid the disadvantages of uneven positioning among shops and difficult unification of images. In the case of unified business theme, the commercial brand of the project will be gradually established by introducing main stores and brand stores under the influence and drive of main stores and brand stores.

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