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: 2023/4

Module Convenor: Dr Ren Ren
Email: r.ren@henley.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 returns, yields, how cash flows areÌýgenerated 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 ofÌýreal?estateÌýinvestments.?Students will be introduced to different concepts of value and how theseÌýrelate to decision making in the property investment market. StudentsÌýwill applyÌýbasic financial andÌýcash flow models to theÌýappraisalÌýofÌýreal estateÌýinvestments, identifying the appropriate approaches for estimatingÌýMarket ValueÌýand Investment ValueÌýas defined by International Valuation Standards. The information content of appraisals willÌýalsoÌýbe?considered,?including?inputs such as rental values,Ìýcapitalisation rates, rental growthÌýrates and exit yields.?Ìý

Assessable learning outcomes:

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

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


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


• Evaluate the information needs of real estate investment appraisals.Ìý


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


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

Additional outcomes:

Students will develop their written communication andÌýnumericalÌýskills.Ìý

Outline content:

• Concepts of price, value and worth;Ìý


• Financial mathematics: compounding, discounting, etc.;Ìý


• Target rates, growth rates and yields;


• Information needs for real estate appraisal;Ìý


• Introduction to market valuation techniques;


• Discounted cash flow modelling;


• IntroductionÌýto risk analysis.Ìý

Global context:

Both national and international examples are used during lectures, though with a 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 for assessment of the taught material. The teaching will be supportedÌýby the use ofÌýonline resources, including an online discussion board.ÌýPreparation for classes includes viewing 6 hours of video recordings.Ìý

Contact hours:

Ìý	Autumn	Spring	Summer
Lectures	18
Tutorials	6
Guided independent study:	Ìý	Ìý	Ìý
Ìý Ìý Wider reading (directed)	85
Ìý Ìý Other	6
Ìý Ìý Essay preparation	85
Ìý	Ìý	Ìý	Ìý
Total hours by term	200	0	0
Ìý	Ìý	Ìý	Ìý
Total hours for module	200

Summative Assessment Methods:

Method	Percentage
Written assignment including essay	100

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

The module willÌýbe assessedÌýthrough oneÌýmajor appraisal assignment. This will 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 and case studyÌýexercises.

Penalties for late submission:

The below information applies to students on taught programmes except those on Postgraduate Flexible programmes. Penalties for late submission, and the associated procedures, which apply to Postgraduate Flexible programmes are specified in the policy 'Penalties for late submission for Postgraduate Flexible programmes', which can be found here: /cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/penaltiesforlatesubmissionpgflexible.pdf
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: /cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/penaltiesforlatesubmission.pdf
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:

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: 30 March 2023