REMB05-Real Estate Investment Appraisal

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: 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 toÌýunderstandÌýthe 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 be investigated,ÌýincludingÌýinputs such as rental values, depreciation rates and exit yields.Ìý

Assessable learning outcomes:

Upon completion of this module, studentsÌýshouldÌýbe able to:Ìý

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  Understand different concepts of value and evaluate their application to real estate;Ìý

  
  


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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

  
  


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  Understand andÌýexamineÌýriskÌýin relation to appraisalÌýoutcomesÌý

  
  

Additional outcomes:

Students will develop their written communication andÌýnumericalÌýskills.Ìý

Outline content:

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  Characteristics of commercial real estate markets,Ìý

  
  


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  Concepts of price, value and worth,Ìý

  
  


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  Applying financial mathematics: discounting, etc.,Ìý

  
  


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  Target rates, growth rates and yields,Ìý

  
  


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  Information needs for real estate appraisal,Ìý

  
  


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  ÌýDiscounted cash flow modelling,Ìý

  
  


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  Introduction to market valuation techniques.Ìý

  
  


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  Introduction to riskÌýmeasurementÌýand analysisÌý

  
  

Global context:

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

Brief description of teaching and learning methods:

This programme is delivered via a block teaching period for each module.Ìý The taught block teaching week includes lectures, class discussions and practical workshops arranged around a case study.Ìý

The block release taught element will be supported by the use of BlackboardÌýand other online resources, including an on-line discussion board and on-line learning support.Ìý

Summative assessment- Examinations:
None

Summative assessment- Coursework and in-class tests:

The module 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 guide lengthÌýofÌý3,500 plus calculations/appendicesÌý(equivalent to a 5,000 word essay).Ìý

AssignmentÌýSubmissionÌýdeadline:ÌýWeek 35Ìý

Formative assessment methods:

Tutorial and case study exercises.Ìý

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 normal pass mark is 50%.ÌýÌý

As this is aÌýcoreÌýModule of Special Significance, students must achieve a mark of at least 40 in order to be awarded the MSc.Ìý

Students completing the IPF DiplomaÌýand/or MSc IPF Entry routeÌýmust achieve a mark of at least 50 in order toÌýobtainÌýthe IPF Qualification.Ìý

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

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Additional Costs (specified where applicable):

No additional costs

Last updated: 27 August 2020