Published Paper Details:

Profitable investment into Real Estate residential projects requires a realistic and more practical approach for evaluating its financial performance and efficiency. Uncertainty in the residential real estate has always been an issue. Till date, financial return of a residential project in India is calculated using a Discounted cash flow model (DCF) which gives a single point value (deterministic result), not including risks and uncertainties. Addressing risks and uncertainties into otherwise deterministic models avoids irrelevant and impractical financial decision and help in framing a more feasible forecasting model. The objectives of this thesis is to develop a suitable investment model for residential real estate along Dwarka Expressway, Gurugram, India using both deterministic and probabilistic financial analysis models- Discounted cash flow (DCF) model and Monte Carlo Simulation respectively. Master plan analysis and real estate market analysis led to selection of �three� different stretches on Dwarka Expressway for which forecasting investment models is developed for better investment decisions. The study divides different risks involved in the study area under five categories- economical, technological, political, legal and social risks. These identified risks are then classified under 7 quantifiable major risks categories that have an impact on the cash flow - Sales risks, Market growth risk, Leverage Risk, Development risk, Inflation risk, Interest rate risk and Taxation risk. These risks with their range of possible values are incorporated into DCF model through Monte Carlo simulation (Probabilistic Model) and a comparison is made between their financial returns for choice of investing along Dwarka Expressway.