REMF34-Investment Appraisal

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:
Module version for: 2016/7

Module Convenor: Dr Steven Devaney

Email: s.devaney@reading.ac.uk

Summary module description:

Aims:
This module enables students to develop understanding of 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 and non-property investments and develop more complex applications for the appraisal of property investment value as defined by International Valuation Standards, as well as apply basic risk adjustment techniques to the outcomes. The information content of appraisals will be fully investigated including depreciation and the use of forecasts of rental values and exit yields.

Assessable learning outcomes:
-Understand different values in exchange and use and evaluate their application to real estate.
-Apply financial mathematics of compounding and discounting to investments
-Evaluate the information needs of commercial real estate investment appraisals including rental value, depreciation, rental growth forecasts and exit yields
-Evaluate the management of risk and apply risk adjustment measures to the outcome of appraisals
-Understand the outcomes of appraisals and their role in decision making

Additional outcomes:
-Construct and adapt spreadsheet templates to undertake cash flow appraisals

Outline content:
-Investment markets and opportunities
-Concepts of price, value and worth,
-The investment characteristics of commercial real estate markets,
-Applying financial mathematics: discounting, etc.
-Information flows within commercial real estate markets,
-The choice of discount rate - investor or investment derivation?
-Use of debt finance
-Basic risk management and analysis.

Brief description of teaching and learning methods:
The module will comprise lecture, class tutorial and problem solving workshops with a class test and an individual project assignment acting as a consolidating and integrating vehicle for the taught material.
The taught element will be supported by the use of online resources. Course information, handouts, presentations and assignment may be supplemented by the use of the discussion board to develop dialogue between students on technical aspects of the assignment and other material.

Contact hours:
  Autumn Spring Summer
Lectures 20
Tutorials 5
Practicals classes and workshops 5
Guided independent study 170
       
Total hours by term 200.00
       
Total hours for module 200.00

Summative Assessment Methods:
Method Percentage
Written assignment including essay 60
Class test administered by School 40

Other information on summative assessment:
The course will include class tests and 1 appraisal assignment. The latter will be a problem solving project which will assess the ability of students to apply cash flow models to multi occupancy real estate investments.

Formative assessment methods:

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
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

Length of examination:
Not applicable.

Requirements for a pass:
The pass-mark for this module is 50%.

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):

Last updated: 21 December 2016

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