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TBC

This course is available on the MSc in Real Estate Economics and Finance. This course is available with permission as an outside option to students on other programmes where regulations permit.

Entry into the MSc Real Estate Economics and Finance or by request from other qualified MSc students. Those qualified will already have knowledge of economics equivalent to a good first degree in the subject. 

This course broadly aims to study how methods from economics and finance can be used to evaluate real estate investment decisions and how to incorporate insights from urban economics to improve the profitability of investments.

In the first part of the term, the course will begin with an introduction to the urban economics of real estate investment, focusing on how shifts in supply and demand across real estate related markets impact the risk and return of an investment. The students will then work towards an understanding of how different methods of varying sophistication can be used in the empirical evaluation of risk.

The second part of the module will deal with more topical issues. These will include (amongst others): real estate development and asset management, with a focus on their impacts on risk and return; real estate investment trusts (REITs), their structures and their performance; real estate portfolio construction and analysis; trends in urban economics and their impact on investment evaluations; machine learning, data analytics and real estate investment.

Assessment for the course will centre on the valuation of a mixed-use retail property in London. A field trip to tour the property and surrounding urban environment will occur during the term.

In the Department of Geography and Environment, teaching will be delivered through a combination of classes/seminars, pre-recorded lectures, live online lectures, in-person lectures and other supplementary interactive live activities.

This course is delivered through a combination of lectures, seminars and workshops across Winter Term.

This course includes a reading week in Week 6 of Winter Term.

Students will be expected to produce 2 essays in the WT.

In their first essay, students will work in their groups to conduct the quantitative analysis for a case study using the standard tools in real estate investment. Each student will prepare a 1000 word essay based on this quatitative work, analyzing the assumptions and methods used and the results. The second essay will also be 1000 words and center on assessing the students ability to incorporate urban economic theory and emprical research into their valuation.These formative exercises closely match the style and structure of the summative coursework. 

• Archer, Wayne R., and David C. Ling. "The three dimensions of real estate markets: Linking space, capital, and property markets." Real Estate Finance 14.3 (1997): 5-11.
• Brueggeman, W. B. and J. D. Fisher (2005) Real Estate Finance & Investments (13th edition or newer), New York City, NY: McGraw-Hill/Irwin
• Clayton, Jim, David C. Ling, and Andy Naranjo. "Commercial real estate valuation: fundamentals versus investor sentiment." The Journal of Real Estate Finance and Economics 38.1 (2009): 5-37.
• Hoesli, Martin, Elion Jani, and André Bender. "Monte Carlo simulations for real estate valuation." Journal of Property Investment & Finance 24.2 (2006): 102-122.
• Gunnelin, Åke, et al. "Determinants of cross‐sectional variation in discount rates, growth rates and exit cap rates." Real Estate Economics 32.2 (2004): 217-237.
• Gyourko, Joseph, and Edward Nelling. "Systematic risk and diversification in the equity REIT market." Real Estate Economics 24.4 (1996): 493-515.
• Lieser, Karsten, and Alexander Peter Groh. "The determinants of international commercial real estate investment." The Journal of Real Estate Finance and Economics 48.4 (2014): 611-659.
• Plazzi, Alberto, Walter Torous, and Rossen Valkanov. "Expected returns and expected growth in rents of commercial real estate." The Review of Financial Studies 23.9 (2010): 3469-3519.
• Sivitanidou, Rena. "Urban spatial variations in office-commercial rents: the role of spatial amenities and commercial zoning." Journal of urban Economics 38.1 (1995): 23-49.
• Daníelsson, Jón. Financial risk forecasting: the theory and practice of forecasting market risk with implementation in R and Matlab. Vol. 588. John Wiley & Sons, 2011.

Essay (100%, 3500 words) in the ST Week 1.

The summative essay will be 3500 words and count for 100% of the student's final grade.

The essay will centre on assessing the students' ability to use the materials and tools discussed during the course to present a rigorous investment strategy.

This will include the ability to produce estimates of the impact of shifts in demand and/or supply for commercial real estate using data and rigorous methods, and the capacity to incorporate these into the evaluation of an investment proposal's risk and return.

The assessment will include a group and an individual component – and students will be asked to reflect on all elements learnt during the term (not just a selected number of weeks).