REMB05-Real Estate Investment Appraisal

Module Provider: Real Estate and Planning
Number of credits: 20 [10 ECTS credits]
Level:7
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2019/0

Email: s.devaney@reading.ac.uk

Type of module:

Summary module description:

This module develops the theory and practice of appraisal for individual property investments, mainly in the context of the commercial and industrial real estate investment markets. It will consider different bases of value, different approaches to appraisal, required returns and yields, how cash flow is generated and how property investment relates to other asset markets. 

Aims:

To enable students to understand the financial, technical and market context of the appraisal of investments in general and the appraisal of real estate in particular. Students will understand the different concepts of value and how they relate to decision making in the property investment market. They will be able to apply simple cash flow models to the pricing of property investments and apply such models for the appraisal of Investment Value and Market Value as defined by International Valuation Standards. The information content of appraisals will be investigated, including inputs such as rental values, depreciation rates and exit yields. 

Assessable learning outcomes:

Upon completion of this module, students should be able to: 

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  Understand different concepts of value and evaluate their application to real estate; 

  
  


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  Apply mathematics of compounding and discounting to real estate investments; 

  
  


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  Evaluate the information needs of real estate investment appraisals; 

  
  


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  Construct and adapt spreadsheet templates to undertake cash flow appraisals; 

  
  

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  Understand the outcomes of appraisals and their role in decision making; 

  
  


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  Understand and examine risk in relation to appraisal outcomes 

  
  

Additional outcomes:

Students will develop their written communication and numerical skills. 

Outline content:

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  Characteristics of commercial real estate markets, 

  
  


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  Concepts of price, value and worth, 

  
  


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  Applying financial mathematics: discounting, etc., 

  
  


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  Target rates, growth rates and yields, 

  
  


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  Information needs for real estate appraisal, 

  
  


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   Discounted cash flow modelling, 

  
  


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  Introduction to market valuation techniques. 

  
  


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  Introduction to risk measurement and analysis 

  
  

Global context:

Both national and international examples are used in the course of lectures, though with a primary focus on the UK commercial real estate market. 

Brief description of teaching and learning methods:

This programme is delivered via a block teaching period for each module.  The taught block teaching week includes lectures, class discussions and practical workshops arranged around a case study. 

The block release taught element will be supported by the use of Blackboard and other online resources. 

Summative assessment- Examinations:
None

Summative assessment- Coursework and in-class tests:

The course will be assessed through one major appraisal assignment. It will be a problem solving project that will assess the ability of students to critically examine techniques and apply them to multi-occupancy commercial real estate investments. Word guide length of 4000 plus calculations/appendices (equivalent to a 5000 word essay). 

Assignment Submission deadline: Monday 27th April 2020 (Out of term time) 

Formative assessment methods:

Tutorial and case study exercises. 

Penalties for late submission:

Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Assessment requirements for a pass:

The normal pass mark is 50%.  

As this is a core Module of Special Significance, students must achieve a mark of at least 40 in order to be awarded the MSc. 

Students completing the IPF Diploma and/or MSc IPF Entry route must achieve a mark of at least 50 in order to obtain the IPF Qualification. 

Reassessment arrangements:

Reassessment will be by the same method as for the module's original assessment requirements, subject to variation by the Examination Board where appropriate 

Additional Costs (specified where applicable):

No additional costs

Last updated: 25 April 2019