REMF46-Valuation

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: Prof Peter Wyatt
Email: p.wyatt@henley.reading.ac.uk

Type of module:

Summary module description:

This module builds on the REMF45 Investment Appraisal and Valuation module and studies the market valuation process; as distinct from the wider appraisal process. It examines both the valuation process and valuation methods, and as well as preparing students for the workplace, it critically examines property valuation practice at both a theoretical and applied level.


Aims:

The aim of this module is to enable students to develop an understanding of the role of property valuation in both investment and occupier markets. Students will understand the different approaches to valuation and be able to match the methods adapted to the role of the valuation. The module will build on the appraisal issues developed in REMF45 Investment Appraisal and Valuation core module and students will be able to distinguish between different concepts of value and the formal definitions of the bases that follow the concept. Students will be able to apply and critically evaluate different techniques and understand their limitations. Students will understand how statutory and quasi-statutory regulations influence and impact upon the valuation process. Students will understand the importance of the valuation process and the internal and external influences affecting this process and its outcomes. 


Assessable learning outcomes:

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





  • Understand what valuation is, i.e. valuation applications: market transactions, performance measurement, financial reporting, loan security, land and property taxation, expropriation, insurance, and the valuation industry: service providers (agents and consultants) and clients. 




  • Be cognisant of international and national standardsand guidance, ethics and professionalism, including conflicts of interest, client influence. 







  • Understand the valuation process: terms of engagement, inspections and information gathering (including measurement), valuation, reporting 




  • Understand the different valuation bases, assumptions and special assumptions 




  • Understand the various approaches to, methods of and techniques for valuing legal interests in real estate 




  • Develop numeracy and problem solving skills in the application of valuation techniques. 




Additional outcomes:

Outline content:

1

Valuation context: industry and stakeholders; reasons for valuing real estate; valuation process; valuation approaches and methods.

2

Comparison method: analysing rents; units of comparison (rents per square metre, retail zoning); yields; hierarchy of evidence; lease terms (rent reviews, break clauses, repairs, insurance, length, etc.); gross rents to net rents

3

Investment method: income capitalisation technique applied to rack-rented and reversionary FHs, leaseholds with fixed profit rents, and analysing reversionary FH transactions (equivalent yields)

4

Residual method: land valuation and profit estimation

5

Profits method: income capitalisation and DCF techniques 

Cost method: DRC, contractor's test, insurance valuations

6

Reading week

7

Lease pricing: lease incentives: rent-free periods, capital contributions, lease buy-backs, etc. Alternative rent payment structures: stepped rents, turnover rents, indexed rents

8

Valuations at rent review, lease end/renewal (inc. surrender and renewal, Landlord and Tenant Act provisions)

9

Valuations for financial reporting and for secured lending

10

Valuations for UK land and property taxation: introduction to valuations for Business Rates and Council Tax

Valuations for expropriation: compensation for land taken, severance, injurious affection, disturbance, planning decisions

11

Governance and regulation: international and national standards; bases; assumptions and special assumptions; ethics and professionalism; conflicts of interest; client influence; registered valuers.


Brief description of teaching and learning methods:

The module will comprise lectures and tutorials.


Contact hours:
  Autumn Spring Summer
Lectures 20 2
Seminars 8
Guided independent study:      
    Wider reading (independent) 140 30
       
Total hours by term 0 168 32
       
Total hours for module 200

Summative Assessment Methods:
Method Percentage
Written exam 100

Summative assessment- Examinations:

The examination for this module will require a narrowly defined time window and is likely to be held in a dedicated exam venue.


Summative assessment- Coursework and in-class tests:

Formative assessment methods:

Penalties for late submission:

The below information applies to students on taught programmes except those on Postgraduate Flexible programmes. Penalties for late submission, and the associated procedures, which apply to Postgraduate Flexible programmes are specified in the policy “Penalties for late submission for Postgraduate Flexible programmes”, which can be found here: https://www.reading.ac.uk/cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/penaltiesforlatesubmissionpgflexible.pdf
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:

A mark of 50% overall


Reassessment arrangements:

Reassessment will be by a three-hour written examination. 


Additional Costs (specified where applicable):

Last updated: 22 September 2022

THE INFORMATION CONTAINED IN THIS MODULE DESCRIPTION DOES NOT FORM ANY PART OF A STUDENT'S CONTRACT.

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