This module provides students with an understanding of the property investment market and the fundamental concepts that underlie investment valuation techniques. The module incorporates lectures and computer laboratory sessions on elementary concepts in real estate investment valuations including: evaluating the time value of money and the analysis of comparable market evidence; the application of real estate investment valuation techniques; and the interpretation of the relationship between real estate investment risk and return. The module provides an introduction to valuation professional standards including the role of the valuer in developing a sustainable built environment. This module encourages the student to explore the application of both traditional and developing cashflow and discounted cash flow (DCF) valuation techniques within the framework of the real estate investment market.
Content to be covered includes:
- Introduction to valuation professional standards (such as International Valuation Standards and RICS Valuation Global Standards) notably the bases of valuation. Valuation considerations including guidance on sustainability and ESG matters in commercial real estate valuations.
- Fundamental concepts underlying traditional valuation techniques including time value of money and application of valuation formulae.
- Evaluation of the timing of cash flows (annual in arrears, quarterly in advance etc.)
- Analysis of comparable market evidence to assess risk and return via yield analysis (including net initial, and net reversionary yields)
- Traditional methods of freehold investment valuation including Term & Reversion and Hardcore methods for a range of property (such as rack-rented, reversionary and over rented investments, single let and multi-let).
- Calculation of Equivalent Yields in traditional valuation appraisals.
- Application of ‘growth explicit’ Discounted Cash Flow (DCF) appraisal techniques to perform real estate investment valuations.
- Application of computer software to facilitate investment valuation appraisals.
- Analysis of real world market evidence from newspaper property supplements and real estate agent websites and brochures to enable students to develop a knowledge of property market values and engage in practical application of comparable analysis and valuation techniques learned.
Lectures and tutorial based investment valuation appraisal workshops.
Self-directed learning requiring learner to access recommended reading, property newspaper vignettes and web sites
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 80 |
| Other Assessment(s) | 20 |