CORPFIN 7049 - Real Estate Valuation and Investment (M)

North Terrace Campus - Semester 2 - 2022

Real estate is a significant investment focus in managing investor portfolios. This course looks at the issues in financing and investing in real estate, with an emphasis on commercial real estate. It covers the general context of real estate as an investment, including the role and contribution of property trusts versus direct investment, and discusses what differentiates real estate from other assets. Valuation models are investigated, including cash flow models, comparative valuation, and the influence of real options values. Real estate investment financing is investigated, looking at project financing as well as general investment. Lastly, issues in project development are considered. Building on the Adelaide Business School?s existing links with the American Real Estate and Urban Economics Association, the course covers the tools used by direct investors and advisors to make better decisions with respect to real estate investment. This relies on case studies of Australian and international projects and investment outcomes to illustrate the issues involved.

  • General Course Information
    Course Details
    Course Code CORPFIN 7049
    Course Real Estate Valuation and Investment (M)
    Coordinating Unit Finance and Banking
    Term Semester 2
    Level Postgraduate Coursework
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per week
    Available for Study Abroad and Exchange Y
    Prerequisites CORPFIN 7005
    Course Description Real estate is a significant investment focus in managing investor portfolios. This course looks at the issues in financing and investing in real estate, with an emphasis on commercial real estate. It covers the general context of real estate as an investment, including the role and contribution of property trusts versus direct investment, and discusses what differentiates real estate from other assets. Valuation models are investigated, including cash flow models, comparative valuation, and the influence of real options values. Real estate investment financing is investigated, looking at project financing as well as general investment. Lastly, issues in project development are considered. Building on the Adelaide Business School?s existing links with the American Real Estate and Urban Economics Association, the course covers the tools used by direct investors and advisors to make better decisions with respect to real estate investment. This relies on case studies of Australian and international projects and investment outcomes to illustrate the issues involved.
    Course Staff

    Course Coordinator: Dr Limin Xu

    Name: Dr Limin Xu Location: Room 12.24, 10 Pulteney St Telephone:8313 0735 (work) Email:limin.xu@adelaide.edu.au
    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

  • Learning Outcomes
    Course Learning Outcomes
    On successful completion of this course, students will be able to:

    1. Identify the core drivers of market value and market performance in the property market.

    2. Evaluate the investor's asset financing model.

    3. Understand the positioning of real estate within a portfolio and the opportunities it presents for investors.

    4. Apply models for the assessment of real estate development projects.

    5. Evaluate and present a professional report on a real estate.

    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)

    Attribute 1: Deep discipline knowledge and intellectual breadth

    Graduates have comprehensive knowledge and understanding of their subject area, the ability to engage with different traditions of thought, and the ability to apply their knowledge in practice including in multi-disciplinary or multi-professional contexts.

    1-5

    Attribute 2: Creative and critical thinking, and problem solving

    Graduates are effective problems-solvers, able to apply critical, creative and evidence-based thinking to conceive innovative responses to future challenges.

    1-5

    Attribute 3: Teamwork and communication skills

    Graduates convey ideas and information effectively to a range of audiences for a variety of purposes and contribute in a positive and collaborative manner to achieving common goals.

    1-5

    Attribute 4: Professionalism and leadership readiness

    Graduates engage in professional behaviour and have the potential to be entrepreneurial and take leadership roles in their chosen occupations or careers and communities.

    1-5

    Attribute 5: Intercultural and ethical competency

    Graduates are responsible and effective global citizens whose personal values and practices are consistent with their roles as responsible members of society.

    1-5

    Attribute 8: Self-awareness and emotional intelligence

    Graduates are self-aware and reflective; they are flexible and resilient and have the capacity to accept and give constructive feedback; they act with integrity and take responsibility for their actions.

    1-5
  • Learning Resources
    Required Resources
    This course is developed around a text book:Geltner, Miller, Clayton and Eihholtz, Commercial Real Estate, Analysis and Investments, OnCourse Learning, 3edition, 2014
    Online Learning
    All material is available on MyUni.
  • Learning & Teaching Activities
    Learning & Teaching Modes
    The course is taught via seminar-based classes, reinforced through class participation in problem solving.
    Workload

    The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

    The University expects full-time students (i.e. those taking 12 units per semester) to devote a total of 48 hours per week (over 12 weeks) to their studies. This means that you are expected to commit approximately 108 hours (9 hours x 12 week) for a three-unit course of private study outside of your seminars. Students are expected to attend all seminars.
    Learning Activities Summary
    The course material consists of 6 topics. The topics are listed below:
    Topic 1: Introduction to Real Estate Valuation (course learning outcome 1,5)
         Real Estate Space and Asset Markets
         Real Estate System Some Basic Urban Economics
         Real Estate Market Analysis
    Topic 2: Basic Financial Economic Concepts and Tools (course learning outcome 2, 5)
        Real Estate as an Investment
        Present Value Mathematics for Real Estate
        Measuring Investment Performance: The Concept of Returns
    Topic 3: Real Estate Valuation and Investment Analysis (course learning outcome 2,5)
        The Basic Idea: DCF and NPV
        Nuts and Bolts for Real Estate Valuation
        Advanced Micro-level Valuation
    Topic 4: Financing and Investment Analysis (course learning outcome 2,4,5)
        Use of Debt in Real Estate Investment
        After-Tax Investment Analysis and Corporate Real Estate 
       Real Estate Investment Capital Structure
    Topic 5: Real Estate Investment (course learning outcome 3,4,5)
        Real Estate and Portfolio Theory
        Equilibrium Asset Valuation and Real Estate's Price of Risk in the Capital Market
        Real Estate Investment Trust (REITs)
    Topic 6: Real Estate Development (course learning outcome 4,5) 
        Real Options and Land Value
        Investment Analysis of Real Estate Development Project

    Note: Reading may be varied during the semester. All .pdf files are uploaded to MyUni.
  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    Assessment Task Task Type Due Weighting Learning Outcome
    Assignment Individual Week 12 30% 1,2,3,4,5
    Mid-term exam Individual Week 6 30% 1,2,3,4,5
    Final Exam Individual TBD 40% 1,2,3,4,5
    Total 100%
    For specific due dates please see MyUni.

    Assessment Detail
    1. One individual assignment (worth 30% towards your final grade)
    This assignment requires you to value a property in Australia. A detailed analysis of the local real estate market condition is the starting point. In addition, you need to predict the future cash flow generated from the asset and use the discount cash flow model to value the property. The quality of the report, the quality of the analysis, and the logical reasoning in developing the analysis are the key factors for the assessment.

    2. Mid-term exam (worth 30% towards your final grade)
    There will be a 60 minutes examination covering modules 1 to 4 in the course. Students are not permitted to take a dictionary (English or English-Foreign) into the examination. The use of a calculator that is incapable of storing text is permitted in the examination. Legible hand-writing and the quality of English expression are considered to be integral parts of the assessment process. While marks will not be deducted for poor hand-writing or English expression, it is stongly recommended that you write clearly to avoid the complications which can arise for examiners as a result of illegible responses.sh expression are considered to be integral parts of the assessment process. Marks may be deducted because of poor hand-writing.

    3. Final exam (worth 40% towards your final grade)
    There will be a 90 minutes examination covering all topics studied in the course. Students are not permitted to take a dictionary (English or English-Foreign) into the examination. The use of a calculator that is incapable of storing text is permitted in the examination. Legible hand-writing and the quality of English expression are considered to be integral parts of the assessment process. While marks will not be deducted for poor hand-writing or English expression, it is stongly recommended that you write clearly to avoid the complications which can arise for examiners as a result of illegible responses.
    Submission
    Students are expected to submit their work by the due date to maintain a fair and equitable system. Students must NOT submit work for an assignment that has previously been submitted for this course or any other course without prior approval from the lecturer-in-charge. Assignments, not complying with the University’s policy on plagiarism, will be forwarded to Academic Integrity for investigation. Please retain a copy of all assignments submitted.

    A copy of the Postgraduate Programs: Communication Skills Guide will have been given to you at the beginning of your program. This guide will assist you structure your assignments. A copy of the guide can also be downloaded from https://www.adelaide.edu.au/professions/hub/downloads/Communications-Skills-Guide.pdf. This publication also provides guidelines on a range of other important communication skills including writing essays and management reports, making oral presentations etc. In preparing any written piece of assessment for your postgraduate studies it is important to draw on the relevant ‘literature’ to support critical analysis. Also essential is to reference the literature used. Correct referencing is important because it identifies the source of the ideas and arguments that you present, and sometimes the source of the actual words you use, and helps to avoid the problem of plagiarism.
    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

  • Student Feedback

    The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

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