This course explores how real estate value is created and appraised in the development sector. This involves an integrated understanding of how law, economics, professional practice and public policy help shape real estate value. Methods of development appraisal and financing are examined in depth.

Classes to run in Semester 1 and delivered in 3 hourly blocks, once per week, over 6 consecutive weeks.

Development Economics (URBAN5082)

None

Assessment:

The course will be formally assessed (100%) by a report, produced as the output from a development appraisal project. This output will be a professional report and containing 2,500 words and series of appraisal calculations on the feasibility of a proposed development and different funding scenarios.

This is an applied assessment with relatively limited background reading, as typical of an academic essay. Therefore, the calculations are in addition to the 2,500 words but substitute for a significant proportion of the standard reading requirement.

This course aims to build on the material covered in the Semester 1 course, Development Process. It seeks to explore how real estate value can be created by development activity and how it is appraised and exploited in the development sector. This involves an integrated understanding of how law, economics, finance, professional practice and planning policy help shape real estate value. Development appraisal methods and financing mechanisms are examined in depth. The course concludes by applying the development appraisal principles and techniques in a real life mock development project that require students to evaluate the implications of different financing scenarios.

In accordance with the specific and evidenced competency requirements of the accreditation body (RICS), by the end of this course students will be able to:

■ evaluate the needs of clients, collect and collate data, and competently apply data analysis skills;

■ explain and critically analyse the factors that influence property values, and how these can be shaped by local, national and international economic forces;

■ critically debate the importance of time and resources issues in the development process (especially human & financial resources);

■ understand and apply the mathematical principles underpinning development appraisals;

■ recognise the different mechanism that can be used to finance development activity and illustrate the links between development viability and financing;

■ appreciate how real estate value can influence, and be influenced by land, planning and urban policies;

■ contribute to the debate on development viability and planning policy;

■ apply residual development appraisals to solve simple development related problems;

■ construct and develop and DCF appraisal and undertake sensitivity analyses and scenario testing on Excel;

■ undertake a feasibility report, and prepare and present a development appraisal report;

■ evaluate economic & financial implications of alternative development specifications and designs; and

■ appraise different financing mechanisms and partnership arrangements in the development process.

Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.

Minimum requirement for award of credit for students on MSc City Planning & Real Estate Development, MSc International Real Estate & Management and MSc Real Estate is D3 or above.

University standard regulations apply to students on other qualifications.