The Framework of Risk Management in A Real Estate Development Project With A Focus on Macroeconomics Aspects: A Case of Mixed-Use Real Estate Project in Ankara Province

Risk expresses the change in the expected values and is the key factor in making decision on large-scale investments with fixed capital. However, unlike uncertainties, risks can be foreseen and incorporated into project plans. The real estate development risks in academic studies vary according to classification types and approaches. Basically, risks are divided into four main groups, which are environmental risks, economic risks, sector-specific risks, and project-specific risks. Costs have recently been following a certain trend in Turkey and housing supply has been increasing based on the increasing demand. There is a requirement for risk management in the real estate development process to keep the risks under control and prevent undesired consequences. The steps to be taken in risk management can be listed as identification of risks, analyzing risks, development of response strategies, and monitoring procedures. In this study, a macroeconomic risk management framework for a mixed-use real estate project that had been started in 2010 was established and the identification, quantification, analyzes of the risks were made. The scenario-sensitivity method was used to analyze the risks. Retrospective response planning (avoid, mitigate, accept and transfer) scenarios were developed and their impact was evaluated for the selected project. In addition, if-then analyzes were used to investigate the actual and target values were and reasons thereof were investigated. According to the research results, macroeconomic variables such as real estate rent index, exchange rates, interest rates, and economic outlook were effective in the deviations from the expected values.