REMB31-Corporate Finance

Module Provider: Real Estate and Planning
Number of credits: 20 [10 ECTS credits]
Level:7
Terms in which taught: Autumn term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2023/4

Module Convenor: Prof Gianluca Marcato
Email: g.marcato@henley.reading.ac.uk

Type of module:

Summary module description:

This module presents concepts of real estate finance, both theoretically and empirically. It can be seen as a course in corporate finance (funding and valuation) applied to real estate topics. It is particularly relevant for investment appraisal because it presents models to determine the discount rate in real estate investment decisions and it reconciles types of cash flows and discount rates to obtain investment values.

Aims:

By the end of the module, students will demonstrate understanding of how financial issues influence decisions involving real estate within firms. They will show awareness of the problems that have to be overcome if real estate is to be treated on the same basis as other assets that are managed by companies. They will be able to extract information from company accounts and to understand the concepts of market efficiency as applied to property and the different approaches that can be taken to incorporate market perspectives into real estate management and decision making. In particular they will understand the forms of financing available to real estate companies/funds and their relative costs. Finally, students will be able to apply formal models to determine discount rates to be used in investment appraisal.

Assessable learning outcomes:

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

• demonstrate an understanding of how financial issues influence decisions involving real estate within firms; 


• analyse the capital structure of a firm and its weighted average cost of capital; 

• demonstrate an understanding of the problems that have to be overcome if real estate is to be treated on thesame basis as other assets that are managed by companies; 


• demonstrate an understanding of concepts of market efficiency as applied to property, and the different approaches that can be taken to incorporate market perspectives into real estate management and decision making; 


• critically discuss the choices of target return required for real estate investments; 


• demonstrate an understanding of the forms of financing available to real estate companies and their relative costs. 

Additional outcomes:

Students will have improved their analytical and presentation skills through the preparation and discussion of case studies. 



There will also be opportunities to improve their IT, and specifically, their spreadsheet skills.

Outline content:

Approaches to investment appraisal using financial techniques, capital budgeting and the use of the Weighted Average Cost of Capital. Financing decisions using different techniques to deal with property and other assets. How capital is raised and what the implications are for company decision makers. Modelling of cost of financing. Understanding company accounts, identifying capital structure and the role of real estate in influencing capital structure. Application of lease or buy decision analysis. 

Brief description of teaching and learning methods:

The module is delivered in a block release format that involves a four day face to face teaching block with pre-course preparation plus online post-teaching support. The module is taught in an interactive format through seminars and workshops. An assessed individual project is the consolidating and integrating vehicle for the taught material. Students are encouraged to share information via Blackboard in the extended online support period which follows the face to face ele ment. An online discussion of the case studies between tutors and students supports the assessment in this module. 

Summative assessment- Examinations:
None

Summative assessment- Coursework and in-class tests:

20% of the assessment will be in the form of an online, multiple-choice test during the module week. 

 

The remaining 80% will be a management report which will usually involve the student applying some aspect of the module to the individual's workplace or a relevant listed public company. This will include analytical and quantitative work. The report has a word guide of 3,000 words (equivalent to a 4,000 word essay). 

Assignment Submission Deadline: Week 15 

Formative assessment methods:

Students will receive feedback on the work they produce during the week delivery. There will also be opportunities for obtaining feedback on the actual assignment via conference calls. The in-class feedback will be done through practical sessions (workshops) where students can compare their work with a proposed solution and ask questions to develop their knowledge further. In someworkshops students may also be asked to present their work to facilitate the discussion. 

Penalties for late submission:

The Support Centres will apply the following penalties for work submitted late: 

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days; 


• where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded. 

The University policy statement on penalties for late submission can be found at:?https://www.reading.ac.uk/cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/penaltiesforlatesubmission.pdf 

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work. 

Assessment requirements for a pass:

The pass mark for this module 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 Certificate, 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 a single project assignment, 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: 30 March 2023