Australian Real Estate Investment Trust (REIT) - Accounting and Finance Assignment Help

Assignment Task:

Overview 
 
The written assignment submission familiarizes students with fundamental hallmarks of a particular method of financing with reference to general investment vehicle types across an industry segment.  
 
Details 

• Assume that you are required to make funding arrangements (i.e. raise capital) for an Australian Real Estate Investment Trust (REIT) which is required to fund a new acquisition (thinking of buying another property) valued at AUD$1 billion. In relation to this proposition, you are required to undertake the following tasks. 
• To obtain a copy of a recently published Annual Report for any REIT listed on the ASX. Initiate telephone contact and communicate a request to forward/post a copy of their annual report to your home address (or via e-mail attachment). Annual company reports are public documents and are not difficult to obtain. You can also obtain additional information through DatAnalysis Premium from the website of Western Sydney University.  
• To examine the overall report, concentrating on the financial statements and notes provided. Comment on your impression of their usefulness to potential “non-accounting” end users. This includes commenting on the liquidity ratios (e.g. current ratio and quick ratio) and capital structure ratios (debt ratio and interest coverage ratio) of the chosen REIT. In addition, discuss the company’s treatment of important accounting issues relating to the property industry, including depreciation, impairments, revaluation, intangibles and construction contracts. 
• To analyse the financial statements and establish the current (existing) Capital Structure of your selected REIT, you need to establish the composition of the sources of funds that goes to make up the current capital structure of the trust. You should also establish how much equity is and how much is debt, as in percentage of the total value. Also see if funds from other sources are utilised.  
• After establishing the capital structure, calculate the current WACC of the trust. Use the methods in the notes to calculate the WACC. Have regard to current interest rates for estimating cost of debt and return on shares for estimating cost of equity capital. The focus is on approach rather than the actual accuracy of the figures. 
• Discuss and decide how your trust should fund its proposed acquisition. Should it raise debt, equity or a mixture of both? Then establish the ratio of each (if applicable) or should the trust utilise funds from any alternative sources. What instruments should be used to raise funds?  
• Students must make sure that the annual report is included together with your assignment. This may be a PDF copy on a USB or burnt CD Rom.  

Assignment Requirements 
 

• The supporting documents must be submitted electronically via the Dropbox. The report must be submitted to Turnitin. 
• Although there is no page limit, this assignment should not exceed 1,800 words using 12 points font size and 1.5 spacing.  
• The submission of the soft copy assignment must be accompanied by a signed assignment cover sheet and the soft copies of all related files.   
• For the avoidance of doubt, although referencing and acknowledgments will be reflected in a marking schedule, failure to reference and acknowledge will lead to automatic failure of the assignment with a 0 mark. Late submission will be penalized in accordance with School policy at the rate of 10% of awardable marks per day or part of the day late.  

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