REMB05: Real Estate Investment Appraisal

Module code: REMB05

Module provider: Real Estate and Planning; Henley Business School

Credits: 20

Level: Postgraduate Masters

When you'll be taught: Semester 2

Module convenor: Professor Pat McAllister, email: p.m.mcallister@henley.reading.ac.uk

Pre-requisite module(s):

Co-requisite module(s):

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: na

Academic year: 2024/5

Available to visiting students: No

Talis reading list: No

Last updated: 28 May 2024

Overview

Module aims and purpose

This module develops the theory and practice of appraisalforreal estate investments assets,mainlyin the context ofthe commercial real estateinvestment markets.It will consider different bases of value, different approaches to appraisal,required returns, yields, how cash flows aregenerated and how real estate investment relates to other asset markets.

This module enables students tounderstandthe regulatory, institutional financial, technical and market context of the appraisal of realestate investments.Students will be introduced todifferent concepts of value and how theserelate to decision making in the real estate investment market. They will apply financial models to the appraisalof real estateinvestments, identifying the appropriate approaches for estimating MarketValue and Investment Value as defined by International Valuation Standards. The information content of appraisals will also be considered,includinginputs such as rental values, capitalisations rates, rental growthrates and exit yields.

Module learning outcomes

By the end of the module, it is expected that students will be able to: 

• Demonstrate a comprenehsive understanding of different concepts of value and their application to real estate investment appraisal and valuation;
• Undertake financial modelling of real estate investment assets and critically assess model inputs and outputs;
• Critically evaluate the information needs of real estate investment appraisals;
• Comprepensively understand the outcomes of appraisals and their role in decision making;
• Understand andexamineriskin relation to appraisaloutcomes, with appropriate reference to advanced academic research.

Module content

• Concepts and bases of value.
• Key concepts and calculations for real estate investment appraisal.
• Target rates, growth rates and yields.
• Estimating Market Value.
• Estimating Investment Value.
• Introducing debt into investment appraisal models. 
• Risk and uncertainty in real estate investment appraisal. 
• Real estate investment appraisal and environmental performance. 

Structure

Teaching and learning methods

The module will comprise lectures andtutorials. The teaching will be supportedby the use ofonline resources.

Study hours

At least 24 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.

Please note the independent study hours above are notional numbers of hours; each student will approach studying in different ways. We would advise you to reflect on your learning and the number of hours you are allocating to these tasks.

Semester 1 The hours in this column may include hours during the Christmas holiday period.

Semester 2 The hours in this column may include hours during the Easter holiday period.

Summer The hours in this column will take place during the summer holidays and may be at the start and/or end of the module.

Assessment

Requirements for a pass

Students need to achieve an overall module mark of 50% to pass this module. 

As this is a core Module of Special Significance, students completing the MSc in Real Estate and MSc Real Estate Investment & Finance 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.

Summative assessment

Penalties for late submission of summative assessment

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

Assessments with numerical marks

• 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 three working days;
• the mark awarded due to the imposition of the penalty shall not fall below the threshold pass mark, namely 40% in the case of modules at Levels 4-6 (i.e. undergraduate modules for Parts 1-3) and 50% in the case of Level 7 modules offered as part of an Integrated Masters or taught postgraduate degree programme;
• where the piece of work is awarded a mark below the threshold pass mark prior to any penalty being imposed, and is submitted up to three working days after the original deadline (or any formally agreed extension to the deadline), no penalty shall be imposed;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

Assessments marked Pass/Fail

• where the piece of work is submitted within three working days of the deadline (or any formally agreed extension of the deadline): no penalty will be applied;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension of the deadline): a grade of Fail will be awarded.

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

Formative assessment

Formative assessment is any task or activity which creates feedback (or feedforward) for you about your learning, but which does not contribute towards your overall module mark.

Reassessment

Additional costs