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: 2022/3

Module Convenor: Dr Steven Devaney
Email: s.devaney@henley.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, yields, how cash flows are 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 real estate investments. Students will be introduced to different concepts of value and how these relate to decision making in the property investment market. They will apply basic financial and cash flow models to the appraisal of real estate investments, identifying the appropriate approaches for estimating Market Value and Investment Value as defined by International Valuation Standards. The information content of appraisals will also be considered, including inputs such as rental values, capitalisations rates, rental growth 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 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 andadapt 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:

• Concepts of price, value and worth, 


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  Financial mathematics: compounding, 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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  Introduction to market valuation techniques;

  
  


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  Discounted cash flow modelling, 

  
  


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  Introduction to risk analysis.

  
  

Global context:

Both national and international examples are used during lectures, though with a 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 teaching will be supported by the use of online resources, including an on-line discussion board. 

Summative assessment- Examinations:
None

Summative assessment- Coursework and in-class tests:

The module will be assessed through one major appraisal assignment. This will assess the ability of students to critically examine techniques and apply them to multi-occupancy commercial real estate investments. Word guide length of 3,500 plus calculations/appendices (equivalent to a 5,000 word essay). 

Assignment Submission Deadline: Week 35 

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: 22 September 2022