17777 Real Estate Equities
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Credit points: 6 cp
Result type: Grade and marks
Requisite(s): 25742 Financial Management OR 25741 Capital Markets
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.
Description
Graduates of this subject will understand how financial instruments can be backed by real estate and develop the skills required of a real estate investment trust (REIT) analyst. The subject prepares students to understand investment vehicles and capital markets. Listed Australian REITs are covered in-depth, with the tools and techniques necessary to deconstruct their annual reports and balance sheets demonstrated and applied to current data. Professionally focused assessments and workshops develop the skills needed in the analysis of real estate equities; to interpret volatile national and global trends in equity markets, and to evaluate the individual components of an Australian REIT's portfolio.
Subject learning objectives (SLOs)
On successful completion of this subject, students should be able to:
| 1. | Consider creative and innovative ideas when analysing real estate equities |
|---|---|
| 2. | Demonstrate appropriate application of financial principles to property investment decisions |
| 3. | Analyse, structure and report the results of research |
| 4. | Demonstrate judgement in critical analysis of independent research |
Course intended learning outcomes (CILOs)
This subject also contributes to the following Course Intended Learning Outcomes:
- Develop alternative solutions to property finance and investment (I.1)
- Apply financial principles to property investment decisions (P.3)
Contribution to the development of graduate attributes
The term CAPRI is used for the five Design, Architecture and Building faculty graduate attribute categories where:
C = communication and groupwork
A = attitudes and values
P = practical and professional
R = research and critique
I = innovation and creativity
Course intended learning outcomes (CILOs) are linked to these categories using codes (e.g. C-1, A-3, P-4, etc.).
Teaching and learning strategies
The subject is delivered in block mode, each block running all day. Classes incorporate a range of teaching and learning experiences, with various modes of presentations used in the sessions including lectures, workshops and tutorials. Feedback is given informally throughout class and formal feedback on Assignment 1 is given in the next block. Feedback on Assignment 2 is given through the Feedback Studio in Turnitin.
Content (topics)
The topics covered in this subject are:
- The comparative corporate structure of unlisted property funds and REITs;
- Comparison of alternative AREIT business models;
- Comparative investment structures of property funds;
- Performance of property funds;
- Property debt funding alternatives;
- Financial modelling of AREIT accounts;
- Alternative acquisition scenarios and their impact on forecast earnings using financial modelling.
Assessment
Assessment task 1: REIT investment strategy analysis
| Intent: | Review and critically analyse the most recent published results of your selected AREIT, using the June Financial Year end results, which include an outlook/guidance statement for the current financial year. Examine the result from an operating (real estate) perspective using such data as geographical weightings, portfolio mix (if one than more asset class), lease expiry profile typically shown as a WALE (Weighted Average Lease Expiry period) etc., and comment on what you believe are the key operating risks for the business. Select an Australian REIT and, using the December 2015 results, provide an overview of both the bottom up and top down drivers that will impact earnings. Take into consideration the investment strategy of the A-REIT as outlined in the 2015 results. | ||||||||||||
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| Objective(s): | This task addresses the following subject learning objectives: 2 and 3 This task also addresses the following course intended learning outcomes that are linked with a code to indicate one of the five CAPRI graduate attribute categories (e.g. C.1, A.3, P.4, etc.): .3 and P.3 | ||||||||||||
| Type: | Report | ||||||||||||
| Groupwork: | Individual | ||||||||||||
| Weight: | 40% | ||||||||||||
| Length: | 1500 words (+/- 5%) | ||||||||||||
| Criteria linkages: |
SLOs: subject learning objectives CILOs: course intended learning outcomes |
Assessment task 2: Analysis using three alternative debt/equity funding options.
| Intent: | Applying the hypothetical acquisition scenario and using the hypothetical acquisition template you are to model the earnings impact of a transaction. The asset will be a hypothetical office asset and you can draw on both agency research and PCA data to help you form your views, on the Brisbane CBD office markets for example. Given that under each scenario, the transaction will be earnings accretive and therefore notionally a positive investment decision you will need to place into context the initial earnings accretion overlaid with what you believe are the positives/negatives from both an office portfolio and overall earnings standpoint from the transaction. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Objective(s): | This task addresses the following subject learning objectives: 1 and 4 This task also addresses the following course intended learning outcomes that are linked with a code to indicate one of the five CAPRI graduate attribute categories (e.g. C.1, A.3, P.4, etc.): .4 and I.1 | ||||||||||||
| Type: | Report | ||||||||||||
| Groupwork: | Individual | ||||||||||||
| Weight: | 60% | ||||||||||||
| Length: | 1500 words (+/- 5%) | ||||||||||||
| Criteria linkages: |
SLOs: subject learning objectives CILOs: course intended learning outcomes |
Minimum requirements
To be eligible to pass the subject, students must complete the assessment items and achieve an overall minimum mark of 50. The DAB attendance policy requires students to attend no less than 80% of formal teaching sessions (lectures and tutorials) for each class they are enrolled in to remain eligible for assessment.
Required texts
The set text for this subject is:
Patrick Rowland, 2012. Australian Property Investment and Financing, Pyrmont: Thompson Reuters.
Recommended texts
Andrew Baum and David Hartzell 2012. Global Property Investment Strategies, Structures, Decisions, Oxford: John Wiley & Sons.