Real Estate Finance & Development

Course Content:

Day 1: Money & Property

Discounted Cash Flow Measurement for Real Estate
Measuring real estate cashflow
Forecasting
Assessing net present value
Cost of capital issues for real estate companies
Costs, taxes and inflation (including stamp duty and VAT)
Capital allowances
Capital budgeting and real estate
Presentation of financial information

Case Study: Comparing cash flow from real estate and manufacturing investment projects

Valuing Property Assets
Site and building analysis
The "Red Book" methodology
Changes and alterations in the Blue Book
Leases and lease construction
Alternative methodologies

Case Study: Valuing offices in different locations

Measuring Property Performance
Applicable concepts and methodologies
Holding property on a corporate balance sheet
Problems and issues with performance evaluation
Sources of data
Evolution of data measurement
International comparisons of performance
Current issues in performance management

Case Study: Comparing the performance of different property sectors in a range of international markets

Day 2: Financing and Developing Property

Mortgages and Bank Finance
Concepts and applicability of the mortgage
Global statistics
Available types of mortgage
The secondary mortgage market
Lending practice and pitfalls
Recent funding developments

Case Study: Structure and benefits of a range of mortgages compared

Legal Issues in Property Investment
Legal aspects of acquisition, use, management, and transfer of real estate
The question of title
Title in secondary transactions
Disclosure and governance in real estate acquisition and ownership
Key case law internationally
Current legal issues affecting the real estate industry

Case Study: Evaluation of legal issues in real estate investment transaction

Developing Property
Essentials of property development
The roles of individual professionals and their accountability
Project feasibility, design and marketing
Project financing and feasibility
Scheduling and budget control
Sales and profit margins

Case Study: Comparison of buy-to-let and buy-to-sell real estate returns

Day 3: Investing in Property

Ownership Vehicles
Listed real estate companies versus direct investment
Investment funds and trusts
Limited partnerships
Securitisation of real estate
The Real Estate Investment Trust in the US market
The European and Australasian REITs market

Case Study: The UK PIF: development and prospects

Risk and Real Estate
Applicable risks in real estate investment
Modelling and evaluating comparative risks
Risk management strategies
Available risk management instruments
Costs and benefits of risk management
Statistical evidence

Case Study: Hedging price risk on commercial real estate

Synthetic Property
Synthetic property on the balance sheet
Replication of property performance
Advantages and disadvantages of synthetic property investment
The development of synthetic property (PINCS, SPOTS etc)
Currently available instruments
Future developments

Case Study: Sale and leaseback - examples, success, failure and analysis

Portfolio Analysis
Characteristics of an investment portfolio
Measuring portfolio performance
VaR as applied to multi-asset portfolios
Real estate in a balanced portfolio
Empirical evidence on real estate investment
Changes in portfolio structure worldwide

Case Study: Comparison of international portfolios with real estate components