Property Investment Appraisal

Access to the module information
When you have sucessfully applied for this course, and payment received, you will be sent a letter which will outline the information required for this module. This will include a direct link to the private area of the module website.

Introduction
The purpose of the module is to enable participants to advance their understanding of techniques, approaches and issues in property investment appraisal. The aim in doing this is to combine topical, practical issues and problems with insights drawn from leading research. The module addresses key concepts such as value, price and worth and covers DCF mathematics and decision rules, building on this to study cash-flow appraisal models and ways of dealing with risk. The module also embraces more specialised areas, such as the appraisal of flexible leases and the actuarial approach to appraisal. Also included are sessions on behavioural finance and behavioural real estate. These sessions emphasise that, in addition to competence in the use of investment appraisal tools, it is also important to understand how people behave in making investment-related decisions.

Learning Aims and Objectives
To develop participants’ ability to:

Module Requirements
Successful completion of or exemption from the foundation modules and prior understanding of computer spreadsheets.

Indicative Content
· Translation of concepts of price, worth and value into bases of valuation in accordance with professional guidance notes;
· Appraisal mathematics; including a review of DCF measures such as NPV and IRR;
· Explicit cash flow appraisals and the information content within investment cash flows;
· Risk adjustment within appraisals;
· The interpretation and use of forecasts in appraisals;
· Appraisal of development options;
· Application of simulation techniques to risk analysis;
· Current issues in investment valuation; responding to changing market conditions and investment characteristics

By the end of this module, you should be able to:

· Advise clients on the institutional and market significance of property investment appraisal as distinct from property valuation;
· Critically evaluate and advise on the selection of recognised appraisal methods;
· Select and apply appropriate valuation methods to freehold and leasehold investments, advising on the strengths and weaknesses of selected methods;
· Differentiate, demonstrating critical awareness, between the valuation of real estate investments and other investment vehicles for the purposes of investment asset selection;
· Investigate and evaluate the significance of current developments in valuation methodology and property research.

Recent participating organisations:

Recent Contributors:
Patrick McAllister – University of Reading
William Rodney – Cass Business School
Neil Crosby – University of Reading
Paul Kennedy - Invesco