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: 2020/1

Email: s.devaney@reading.ac.uk

Type of module:

Summary module description:

This module develops the theory and practice of appraisalÌýforÌýindividual property investments,ÌýmainlyÌýin the context ofÌýthe commercial and industrialÌýreal estateÌýinvestment markets.ÌýIt will consider different bases of value, different approaches to appraisal,Ìýrequired returnsÌýand yields, how cash flow is generated and how property investment relates to other asset markets.Ìý

Aims:

To enable students to understand the financial, technical and market context of the appraisal of investments in general and the appraisal of realÌýestate in particular.ÌýStudents 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 beÌýinvestigated,ÌýincludingÌýinputs such as rental values, depreciation rates and exit yields.Ìý

Assessable learning outcomes:

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

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

  
  


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

  
  


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  Evaluate the information needs of real estate investment appraisals.Ìý

  
  


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  Construct and adapt spreadsheet templates to undertake cash flow appraisals.Ìý

  
  


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  Understand the outcomes of appraisals and their role in decision making.Ìý

  
  

Additional outcomes:

Students will develop their written communication andÌýnumericalÌýskills.Ìý

Outline content:

• Characteristics of commercial real estate markets;Ìý


• Concepts of price, value and worth;Ìý


• Applying financial mathematics: discounting, etc.;Ìý


• Target rates, growth rates and yields,Ìý


• Information needs for real estate appraisal,Ìý


• Discounted cash flow modelling;Ìý


• Introduction to market valuation techniques;


• Introduction to risk measurement and analysis.Ìý

Global context:

Both national and international examples are used in the course of lectures, though with a primary focus on the UKÌýcommercial real estate market.Ìý

Brief description of teaching and learning methods:

The module will comprise lectures andÌýproblem solvingÌýworkshops, with an individual project assignmentÌýfor assessment of the taught material. The taught element will be supportedÌýby the use ofÌýonline resources.Ìý

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

The course willÌýbe assessedÌýthrough oneÌýmajor appraisal assignment. It will be aÌýproblem solvingÌýprojectÌýthatÌýwill assess the ability of students to critically examine techniquesÌýand apply them toÌýmulti-occupancy commercialÌýreal estate investments. Word lengthÌýofÌý3,500 plus calculations/appendicesÌý(equivalent to a 5,000 word essay). The project submission date will be in week 20 (first week of spring term).Ìý

Formative assessment methods:

Tutorial exercisesÌý

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 the same method as for the module's original assessment requirements, subject to variation by the Examination Board where appropriate.Ìý Ìý

Additional Costs (specified where applicable):

Last updated: 27 August 2020