RE3DAF-Development Appraisal and Finance

Module Provider: Real Estate and Planning
Number of credits: 20 [10 ECTS credits]
Level:6
Terms in which taught: Autumn / Spring term module
Pre-requisites: RE2VAL Property Valuation and RE1IAP Investment Appraisal
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2021/2

Module Convenor: Prof Pat McAllister
Email: p.m.mcallister@henley.reading.ac.uk

Type of module:

Summary module description:

ThisÌýmodule covers the approaches used to evaluate and appraise the financial viability of real estate development projects. Specifically, this module will provide knowledge and understanding of a range of financial appraisal techniques and their application to real estate development opportunities. An understanding of the way in which land value is assessed and the distribution of returns from real estate development underpins the content of this module. It then builds on this understanding in order to investigate the way in which risks and rewards associated with real estate development activity might be shared. The module examines a range of debt and equity investments in real estate development projects.

Aims:

ThisÌýmodule examines the methods used to appraise the financial viability of development projects. Specifically, this module will critically examine the inherent value systems of various development viability appraisal techniques in an economic, social and environmental context. An understanding of the way in which land value is created and distributed underpins the content of this module. It then builds on this understanding in order to investigate the way in which financial risk and reward associated with development activity might be shared.

Assessable learning outcomes:

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

• apply different development appraisal techniques;


• incorporate equity and debt funding in real estate development appraisals;


• analyse the nature and distribution of development risk;


• appreciate the problems of risk identification, measurement, management and control in real estate development projects.

Additional outcomes:

Outline content:

• Recap and critique of simple residual valuation


• Cash flow residual valuation


• Modelling debt and equityÌý


• Risk analysis and management


• Development viability appraisal in the planning system


• Sources of development finance

Brief description of teaching and learning methods:

Lectures supported by workshops.

Contact hours:

Ìý	Autumn	Spring	Summer
Lectures	9	9
Practicals classes and workshops	9	9
Guided independent study:	Ìý	Ìý	Ìý
Ìý Ìý Wider reading (directed)	5	6
Ìý Ìý Advance preparation for classes	5	6
Ìý Ìý Revision and preparation	18	18	34
Ìý Ìý Essay preparation	36	36
Ìý	Ìý	Ìý	Ìý
Total hours by term	82	84	34
Ìý	Ìý	Ìý	Ìý
Total hours for module	200

Summative Assessment Methods:

Method	Percentage
Written exam	50
Written assignment including essay	50

Summative assessment- Examinations:

One two-hour paper to be taken at the time of final examinations.

Summative assessment- Coursework and in-class tests:

Simulated professional reportÌýwith a hand-inÌýin the final week of Spring Term (Week 30). TheÌý reports will beÌýequivalent to a 2,500 word submission.

Formative assessment methods:

No formative assessmentÌý

Penalties for late submission:

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:
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% overall.

Reassessment arrangements:

Reassessment will be by a three-hour exam, subject to variration by the Examination Board where appropriate.

Additional Costs (specified where applicable):

Casio FX-83GTx or Casio FX-85GTx

Last updated: 12 April 2021