MSc Real Estate Asset Management / Course details

The course unit will build on the knowledge and skillsets acquired in the pre-requisite course unit - PLAN60191 Real Estate Investment and Finance in Semester 1. It will cover various sources of funding and their pricing mechanisms. In terms of debt funding, the coverage will include private lending, mortgages, venture capital and hybrid forms of financing. Through the case studies and discussions in the lectures and workshops, the students will be equipped with knowledge of the real estate capital markets. Students will develop an overall awareness of a wide range of issues related to financing decisions and associated risks and uncertainty relevant to real estate.

PLAN60191 is a Co-Requisite of PLAN60292

The content of the course unit will be delivered through the following indicative weekly structure:

Week-01: Principles underlying decisions about capital structure, debt and equity financing
Week-02: Analysis of sources and implications of real estate financing
Week-03: Risk vs uncertainty in investment decision process; Monte Carlo Simulation
Week-04: Probabilistic Scenario Analysis using Decision Trees
Week-05: Value of choice in real estate investment; Real Options
Week-06: Real Options Analysis: using business cases
Week-07: Foundations of financial modelling in excel
Week-08: Building an excel-based project finance model
Week-09: no lecture (PEM field trip week: date varies from year to year)
Week-10: Model cash flows for a real estate development project
Week-11: Sensitivity analysis for a project’s exposure to key drivers
Week-12: Revision session and assignment briefing

** 2-hour workshops in computer labs are tentatively planned for weeks 6, 8, 10 and 11.

Students will acquire detailed knowledge and skillsets through a combination of lectures, seminars and independent study with materials delivered through in-class contact hours and online platform.

A range of teaching and learning methods will be adopted to introduce the topics and build skills in a structured and sequential manner. Workshops in computer labs will be used to develop familiarity and competence in using financial modelling platform and software with real world information.

All unit material will be made available online. Formative feedback will be provided through Q&A, discussion forums and interactive activities within lectures and workshops. Verbal feedback will be available on coursework discussed during consultation hours. Where appropriate, the discussion board on Blackboard will be used as a repository for FAQs related to the course unit content and assignment.

** Resources needed for this course unit are computing time in semester 2 in computer labs and financial modelling platforms with information, tools and spreadsheet templates.

Students should be able to:

• Develop a solid understanding of fundamental concepts in finance relevant to real estate
• Demonstrate a full knowledge of the theory and practice of financing real estate projects
• Develop critical insights in appraising financial decisions and modelling outcomes along with clear identification of their       risks and uncertainties
• Develop competence and understanding to be able to apply modelling tools in real world scenarios with confidence
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Students should be able to:

• Have a critical opinion about the finance and capital market theories and issues related to their application in real estate;
• Systematically approach the construction of potential solutions and evaluate applicability to real world problems
• Produce logical arguments supported by sound empirical evidence
• Be aware of limitations of using financial modelling and be mindful of their sensitivities

Students should be able to:

• Apply appropriate tools and techniques to evaluate options for financing real estate investment and development projects
• Design analytical framework and develop conclusions based on evidence and make considered choice of inputs leading to sound modelling outputs
• Work with different methods and a variety of analytical and modelling concepts commonly used in practice

Students should be able to:

• Manage complex tasks in a goal-oriented environment and deliver to strict deadlines
• Write reports that are based on sound research, objective, coherent and logically structured
• Develop quantitative and computing skills

 

Written assignment (3000 words) 100% weighting

Final summative feedback via VLE in line with faculty requirements.

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Collier, N. S., Collier, C. A., & Halperin, D. A. (2007). Construction funding: the process of real estate development, appraisal, and finance. John Wiley & Sons.

Coval, J., Jurek, J., & Stafford, E. (2009). The economics of structured finance. Journal of Economic Perspectives, 23(1), 3-25.

Fabozzi, F. J. (Ed.). (2001). Accessing capital markets through securitization (Vol. 76). John Wiley & Sons.

Gau, G. W., & Wang, K. (1990). Capital structure decisions in real estate investment. Real Estate Economics, 18(4), 501-521.

Geltner, D., Miller, N. G., Clayton, J., & Eichholtz, P. (2001). Commercial real estate analysis and investments (Vol. 1). Cincinnati, OH: South-western.

Geltner, D., & De Neufville, R. (2018). Flexibility and real estate valuation under uncertainty: a practical guide for developers. Wiley Blackwell.

Lea, M. J. (1990). Sources of funds for mortgage finance. Journal of Housing Research, 1(1), 139-161.

Ling, D. C., & Naranjo, A. (1999). The integration of commercial real estate markets and stock markets. Real Estate Economics, 27(3), 483-515.

Riddiough, T. J. (2004). Optimal capital structure and the market for outside finance in commercial real estate. Real Estate Finance, 21(3), 3.

Trigeorgis, L. (Ed.). (1995). Real options in capital investment: Models, strategies, and applications. Greenwood Publishing Group.

Yavas, A., & Sirmans, C. F. (2005). Real options: Experimental evidence. The Journal of Real Estate Finance and Economics, 31(1), 27-52.

Private study: 60 hours
Directed reading: 60 hours