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RE2VAL-Property Valuation
Module Provider: Real Estate and Planning
Number of credits: 20 [10 ECTS credits]
Level:5
Terms in which taught: Autumn / Spring / Summer module
Pre-requisites: RE1IAP Investment Appraisal
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2021/2
Module Convenor: Prof Peter Wyatt
Email: p.wyatt@reading.ac.uk
Type of module:
Summary module description:
This module identifies theÌýprocesses, procedures and practices necessary to value real estate, particularly commercial property investments. It examines the valuationÌýprocess,Ìýincluding regulatory framework, role of the valuation and different concepts of value. It examines in detail various methods of valuation, including which ones are appropriate for which role, and examines the limitations of these methods and the results.
Aims:
To develop the students’ understanding of the underlying principles of valuation and to explain the various approaches to and methods of property valuation.
Assessable learning outcomes:
Upon completion of this module, students should be able to:Ìý
- Understand what valuation is, i.e. valuation applications: market transactions, performance measurement, financial reporting, loan security, land and property taxation, expropriation, insurance, and the valuation industry: service providers (agents and consultants) and clients;Ìý
- Be cognisant of international and national standards and guidance, ethics and professionalism, in cluding conflicts of interest, client influence;Ìý
- Understand the valuation process: terms of engagement, inspections and information gathering (includingÌýmeasurement), valuation, reporting;Ìý
- Understand the different valuation bases, assumptions and special assumptions;Ìý
- Understand the various approaches to, methods of and techniques for valuing legal interests in real estate.
Additional outcomes:
Develop numeracy and problem-solving skills in the application of valuation techniques.Ìý
Outline content:
Autumn TermÌý
1 | Valuation context: industry and stakeholders; reasons for valuing real estate; valuation process; valuation approaches and methods.Ìý |
2 | Comparison method: analysing rents; units of comparison (rents per squa re metre, retail zoning); yields; hierarchy of evidence; lease terms (rent reviews, break clauses, repairs, insurance, length, etc.); gross rents to net rentsÌý |
3 | Investment method: income capitalisation technique applied to rack-rented and reversionary FHsÌý |
4 | Investment method and comparison method: analysing reversionary FH transactions (equivalent yields)  ; |
5 | Investment method: income capitalisation technique applied to freeholds with leases subject to breaks and to leaseholds with fixed profit rentsÌý |
6 | Reading weekÌý |
7 | Residual method: land valuation and profit estimationÌý |
8 | Profits method: income capitalisation and DCF techniquesÌý |
9 | Cost method: DRC, contractor's test, insurance valuationsÌý |
10 | Governance and regulation: international and national standards; bases; assumptions and special assumptions; ethics and professionalism; conflicts of interest; client influence; registered valuers.Ìý |
11 | Revision WorkshopÌý |
Ìý
Spring TermÌý
1 | Market valuations: valuations at leaseÌýstartÌý |
2 | |
3 | Market valuations: alternative rent arrangementsÌý |
4 | Market valuations and investment valuations: relationship between ARY and DCFÌý |
5 | Market valuations and investment valuations: DCF applicationsÌý |
6 | Reading WeekÌý |
7 | Specialist valuationsÌý |
8 | Valuations for financial reporting and for secured lendingÌý |
9 | Valuations for UK land and property taxation: introduction to valuations for Business Rates and Council TaxÌý |
10 | Valuations for expropriation: compensation for land taken, severance, injurious affection, disturbance, planning decisionsÌý |
11 | Revision WorkshopÌý |
Ìý
Brief description of teaching and learning methods:
The material will be delivered in two hours of lectures each week, supported byÌýtutorials.Ìý
Ìý | Autumn | Spring | Summer |
Lectures | 20 | 20 | 2 |
Tutorials | 8 | 8 | |
Guided independent study: | Ìý | Ìý | Ìý |
Ìý Ìý Wider reading (independent) | 10 | 10 | |
Ìý Ìý Exam revision/preparation | 30 | ||
Ìý Ìý Preparation for tutorials | 46 | 46 | |
Ìý | Ìý | Ìý | Ìý |
Total hours by term | 84 | 84 | 32 |
Ìý | Ìý | Ìý | Ìý |
Total hours for module | 200 |
Method | Percentage |
Written exam | 100 |
Summative assessment- Examinations:
One three-hourÌýexam
Summative assessment- Coursework and in-class tests:
Formative assessment methods:
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.
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 variation by the Examination Board where appropriate.
Additional Costs (specified where applicable):
Specialist equipment or materialsÌý-ÌýCalculator:ÌýCasio FX-83GTPLUS or Casio FX-85GTPLUSÌý
Last updated: 8 April 2021
THE INFORMATION CONTAINED IN THIS MODULE DESCRIPTION DOES NOT FORM ANY PART OF A STUDENT'S CONTRACT.