RE3PDF-Property Development Finance
Module Provider: Real Estate and Planning
Number of credits: 10 [5ECTS credits]
Terms in which taught: Autumn and Summer
Module Convenor: Professor
CM
Lizieri
Pre-requisites:
Co-requisites:
Modules excluded:
Module version for: 2008/9
Email: c.m.lizieri@reading.ac.uk
Aims:
The aim of this part of the module is to introduce students to the various forms of funding available for development. In particular it is hoped to make students aware that a successful development is a combination of financial expertise and property skills. To this end, therefore, we will not concentrate on a case by case approach as each project is unique and the choice of funding used in one case will not be the form used in another. Rather the course will emphasise the changing nature of development finance through a discussion how and why funding has developed since over the last thirty years.
Assessable learning outcomes:
By the end of the module it us expected that the student will be able to:
Additional outcomes:
Outline content:
The module is designed to provide the essential background information students will need to understand when considering which forms of finance to use in the property development process. An appreciation of the various financial techniques is important as the right form of finance can enhance a poor project, while the wrong form of finance can sink a good project. In addition the forms are constantly changing over time.
Material covered in the module will include:
• Raising capital, capital structure, risk and return;
• The debt- equity decision;
• Bank lending principles : risk analyses and pricing;
• Mezzanine and participating debt and profit sharing;
• Bank regulation and the role of banks in property cycles;
• Capital markets – bond and CMBS capital;
• Interest rate risk and hedging strategies;
• Equity finance in the development process.
Brief description of teaching and learning methods:
There will be one two hour lecture (divided by a short break) each week.
Contact hours:
| Autumn | Spring | Summer | |
| Lectures | 20 | 1 | |
| Tutorials/seminars | |||
| Practicals | |||
| Other contact (eg study visits) | |||
| Total hours | 20 | 1 | |
| Number of essays or assignments | |||
| Other (eg major seminar paper) |
Assessment:
Coursework
None
Examinations:
A two-hour paper to be taken at the time of the Part 3 Final Examinations.
Requirements for a pass:
A mark of 40%
Reassessment arrangements:
One two-hour examination paper in August/September following finals.