REMF45-Investment Appraisal and Valuation

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: 2018/9

Email: s.devaney@reading.ac.uk

Type of module:

Summary module description:

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.

Aims:

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 investments and apply such models for the appraisal of Investment Value and Market Value as defined by International Valuation Standards. The information content of appraisals will be investigated including inputs such as rental values, depreciation rates and exit yields.

Assessable learning outcomes:

- Understand different concepts of value and evaluate their application to real estate. 

- Apply mathematics of compounding and discounting to real estate investments.

- Evaluate the information needs of real estate investment 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:

- Characteristics of commercial real estate markets,

- Concepts of price, value and worth,

- Applying financial mathematics: discounting, etc.,

- Target rates, growth rates and yields,

- Information needs for real estate appraisal,

- Discounted cash flow modelling,

- Introduction to market valuation techniques.

Brief description of teaching and learning methods:

The module will comprise lecture, class tutorial and problem solving workshops, with class tests and an individual project assignment acting as a consolidating and integrating vehicle for assessment of the taught material. The taught element will be supported by the use of online resources.

Summative assessment- Examinations:

Not applicable.

Summative assessment- Coursework and in-class tests:

The course will include a class test and an appraisal assignment. The latter will be a problem solving project which will assess the ability of students to apply market valuation techniques and cash flow models to multi-occupancy commercial real estate investments. The class test will take place in either week 14 or week 15 (penultimate and final weeks of autumn term). The project submission date will be in week 20 (first week of spring term).

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

Assessment requirements for a pass:

The pass-mark for this module is 50%.

Reassessment arrangements:

Reassessment will be by means of a single problem solving project involving investment appraisal techniques, subject to variation by the examination board where appropriate.

Additional Costs (specified where applicable):

Last updated: 31 July 2018