Module title

Advanced Valuation

CRN

26529/32037

Level

6

Assessment title

Coursework 2

Weighting within module

This assessment is worth 50% of the overall module mark.

Submission deadline date and time

Thursday, 12^th May 2022 16:00 hrs

For coursework assessments only: students with a Reasonable Adjustment Plan (RAP) should check their RAP to see if an extension to this submission date has been agreed.

Module Leader/Assessment set by

Dr. Uche Joyce Ogbonda

Room 500a, 5th floor Maxwell Building

Salford, Manchester, M5 4WT

T: +44(0) 01612953712

U.J.Ogbonda2@salford.ac.uk

Appointments by pre-arrangement

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 Knowledge and Understanding

 Transferable Skills and other Attributes

Assessed intended learning outcomes

On successful completion of this assessment, you will be able to:

1. Develop awareness of the procedures and processes for the valuation of complex and specialised properties.

2. Understand and critique the contemporary growth explicit investment calculations

3. Develop the competence to carry-out and evaluate specialised and complex real estate valuations

4. Design and apply models/techniques for real estate investment decision-making relating to specialised and complex properties.

5. In-depth understanding of valuation theories and methodologies/techniques

6. Appreciation of complex valuation situations

7. Critical thinking

8. Problem solving and decision-making

9. Communication and engagement

Module Aims

1.    Demonstrate in-depth appreciation of valuation theories, concepts, principles, and processes

2.    Undertake critical examination of valuation methods and techniques

3.    Apply valuation theories, concepts, principles and techniques to real world complex and specialised properties.

4.    Understand the contemporary methods of valuation: Discounted Cash Flow and Short-Cut Discounted Cash Flow

5.    Provide reasoned investment advice to clients

Word count/ duration (if applicable)

 Submission Format

N/A

 ·  All submissions should have a cover sheet. This should state the module, and the student number.

 ·  As the University will mark assessments anonymously where this is possible, please use your student roll number and not your name on your submission.

Feedback arrangements

There will be no feedback on this coursework.

Support arrangements

You can obtain support for this assessment

· Through the frequently Asked Questions on the Blackboard and

· Through booking for a one-on-one meeting with the module tutor or sending an email to U.J.Ogbonda2@salford.ac.uk  with responses expected within 48 hours of the request.

askUS

Good Academic Conduct and Academic Misconduct

The University offers a range of support services for students through askUS.

 Students are expected to learn and demonstrate skills associated with good academic conduct (academic integrity). Good academic conduct includes the use of clear and correct referencing of source materials. Here is a link to where you can find out more about the skillswhich students needhttps://www.salford.ac.uk/library/skills-for-learning.Academic Misconduct is an action which may give you an unfair advantage in your academic work. This includes plagiarism, asking someone else to write your assessment for you or taking notes into an exam. The University takes all forms of academic misconduct seriously.  You can find out how to avoid academic misconduct here.

Assessment Information

Personal Mitigating Circumstances

Personal Tutor/Student Progression Administrator

If you have any questions about assessment rules, you can find further information in Blackboard in the Assessment Support area.If personal mitigating circumstances may have affected your ability to complete this assessment, you can find more information about personal mitigating circumstances procedure here.

 If you have any concerns about your studies, contact your Personal Tutor or your Student Progression Administrator.

Assessment Criteria

Grades are given in the following bandings:

In Year Retrieval Scheme

Your assessment is not eligible for in year retrieval. If you are eligible for this scheme, you will be contacted shortly after the feedback deadline.

Reassessment

If you fail your assessment, and are eligible for reassessment, you will need to resubmit on or before 29^th JULY 2022.

You will be asked to resubmit the same piece of work unless advised otherwise.

For students with accepted personal mitigating circumstances for absence/non submission, this will be your replacement assessment attempt. 

Assessment task details and instructions:

Instructions:

Answer all 5 questions[K11] [UO2] [K13] 

Electronic calculators are allowed.

An unmarked copy of Parry’s Valuation Tables is permitted

Question 1

Critically analyse the main requirements for undertaking a valuation of businesses as a going concern and identify how these differ from a standard valuation of property.  You should make reference to VPGA3 of the RICS Valuation Global Standards 2022. (pros and cons) (500 words here)

(20 Marks)

Question 2

 Value the freehold interest in a modern office block situated at no 4. Briton Road. Two years ago, the property was let at a rent of £220,000 pa. The[K14] [UO5] [K16]  lease contains a five yearly upward only rent review clause. The current market rent is £260,000 pa. Comparable property investment disposals have achieved an all risks yield of 5.5% and the equated yield is set at 10%.

 You are required to value the property using the following:

Ø  The traditional Investment Method(5 Marks)

Ø  The Short-Cut Discounted Cashflow Method (Please note that you are required to calculate the growth rate) (12 Marks)

Ø   Identify areas where there are differences in value in the two methods used and explain why these differences may occur(3 Marks)

 Question 3

Your client has instructed you to provide a valuation of a disused mill in Greater Manchester for insurance reinstatement purposes.  He would also like to know the rateable value of the property.  The building was constructed in the 18^th century and is 6 storey’s high on a floor plate of 7,700m².  The building is situated on a site measuring 1 hectare You are required to use the BCIS unit cost rate of modern materials (£1,009.00) to establish the costs per m² and make any other relevant assumptions relevant to an insurance valuation. You are then required to ascertain the rateable value of the property at a yield of 5.5%.For this question the following information has been given please put it in the correct format with the formulas  1^st part of the question Cost of building= 7,613,914  apply the 90% to find the land valueadd the 1.5 million per hectar after detecting the 90%  so based on this the capital value will be 2,261,000 this is what its going to be worth and this is what it will be multiplied with 5.5 to get the rateable value = 124,376 (8 Marks Critically discuss why The Cost Method of valuation is not appropriate for attaining an accurate reflection of the market value of a property. (12 Marks)

Question 4

Critically analyse the use of automated valuation modelling as a tool for establishing the market value of a property. 500 words here pros and cons(20 Marks)

Question 5

 Your client is interested in purchasing a factory unit which has been advertised at £21,250,000.  You have been instructed to advise on the viability of the investment using the Discounted Cashflow Method (long-cut)  of valuation to provide a net present value (NPV). The property has recently been let for a term of 25 years with 5 yearly rent reviews.  The rent passing is £1,700,000.00 pa with an all-risks yield of 7.5%. The growth rate is 3.5%.(15 Marks)

Please establish the Internal Rate of Return for the above property.(5 Marks)