## RE1IAP-Investment Appraisal

Module Provider: Real Estate and Planning
Number of credits: 20 [10 ECTS credits]
Level:4
Terms in which taught: Autumn / Spring / Summer module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites: RE1PREP Projects in Real Estate and Planning (1)
Modules excluded:
Current from: 2020/1

Module Convenor: Dr Gianluca Marcato

Type of module:

Summary module description:

This module introduces students to basic financial mathematics and their application for the pricing of equities, bonds, mortgages and real estate assets. Following some introductory material on asset classes and performance measurement, the students will apply models to assess investment decisions. The first term focuses on assets different from real estate, while the second term builds on previous knowledge and is entirely dedicated to the appraisal of property.

This module is delivered at the University of Reading and University of Reading Malaysia.

Aims:

The module aims to introduce the student to the mathematics, techniques and methodologies underpinning the assessment and, appraisal of several assets and to introduce the characteristics of commercial property as an investment class.

Assessable learning outcomes:

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

• understand the performance and characteristics of a range of investment asset classes

• apply financial mathematics to the appraisal of real estate, equities, bonds and mortgages;

• solve practical problems using discounting and compounding related to the appraisal of income flows;

• discuss and describe the inves tment characteristics of commercial real estate as an asset class relative to other major investment opportunities;

• recognise, outline and apply different methods of property real estate appraisal.

The module also aims to encourage the development of oral communication, problem solving, business awareness, spreadsheet, and numeracy skills, particularly in tutorials and drop-in sessions. These represent key transferable business skills.

Outline content:

The module has two parts.

• Part 1 (Autumn Term) covers basic investment mathematics and appraisal methods used for different assets, as well as an introduction to performance measurement and characteristics of such assets.

• Part 2 (Spring Term) applies the methods taught in term 1 to real estate-specific examples and develops skills related to real estate market analysis. It introduces key concepts and methods of real estate investment appraisal through discounted cash flow models, including key inputs, assumptions and outcomes.

Brief description of teaching and learning methods:

Each term consists of 10 x 2-hour lectures and supporting tutorials/drop-in sessions at the times specified on the term timetable. The associated tutorials and drop-in sessions are designed to provide feedback to students on their learning process and to reinforce how the various appraisal techniques are applied. Students are expected to complete all work set on a weekly basis and they may be called upon to answer questions.

Contact hours:
 Autumn Spring Summer Lectures 20 20 2 Seminars 4 1 Guided independent study: Wider reading (independent) 30 35 Exam revision/preparation 54 Preparation for tutorials 20 10 Completion of formative assessment tasks 4 Total hours by term 74 69 57 Total hours for module 200

Summative Assessment Methods:
 Method Percentage Written exam 95 Class test administered by School 5

Summative assessment- Examinations:

One three-hour examination.?

Summative assessment- Coursework and in-class tests:

Two multiple choice tests with a 2.5% weight each.

Formative assessment methods:

The teaching method also includes a series of seminar exercises where students attempt to solve problems and case studies. Participation is essential to acquire full knowledge. Tutorials, drop-in sessions and seminar-like lectures provide extensive feedback to students who want to improve their knowledge and they should be regarded as an effective feedback system to test abilities and ask for clarifications.

To facilitate the learning process, an optional weekly drop-in session will be offered during the Autumn term. Students are strongly recommended to use these sessions, especially if they find difficulties in their week-by-week learning process.

Four tutorials are set up in the Spring term and students are required to attend those.

Penalties for late submission:

The Module Convenor will apply the following penalties for work submitted late, in accordance with the University policy:

• where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the 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: http://www.reading.ac.uk/web/FILES/qualitysupport/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 at least 40%.

Reassessment arrangements:

Re-examination by a three-hour exam during the summer resit period?(100%).?