Evaluation of Financial Efficiency of Real Estate Investment Projects: The Significance of Sustainability Indicators in the Long-Term Perspective

The paper presents the real estate investment project evaluation system developed using multi-criteria decision-making methods and based on the findings of an empirical study analyzing the significance of sustainability criteria involving experts from the real estate and construction sector. The proposed evaluation system differs from conventional practices in that environmental, social and economic sustainability aspects are assessed as essential elements contributing to the financial value, taking into consideration the potential risks of long-term depreciation or opportunities for asset value increase. The hierarchical structure of evaluation criteria for real estate investment projects is presented, and the Economic Sustainability Index is derived, which is used to calculate the correction coefficient for financial value of investment projects. By incorporating the correction coefficient into the discounted cash flow analysis through an adjusted discount rate, a more accurate value for real estate investment projects can be determined. The practical application of the proposed multi-criteria evaluation system demonstrates its applicability to determine the financial efficiency of investment projects, with a particular focus on assessing the long-term value of real estate assets.