Real Estate Valuation and Investment Individual Assignment

Assignment Task

The quality of the analysis and the logical reasoning in developing the analysis are the key factors for the assessment.

1. Describe the fundamental local economic and property market conditions; provide a brief introduction of the selected property.

2. Perform detailed analysis of the local economic indicators (i.e. population growth rate, personal income, inflation rate, unemployment rate and so on), and examine how these economic indicators are linked to the selected property (i.e. rent, vacancy rate, operating expense and resale price).

3. Based on your assumptions (please state clearly what are your assumptions) and the analysis in step 2, you need to estimate the future 10 years of cash flows generated from the selected property.

4. Collect the information from the capital market and the property market (i.e. stock market return, REITs index return, property market return, and so on), and use the appropriate approach to estimate the discount rate for the selected property.

5. Use the discount cash flow approach to estimate the present value of the selected property, perform some sensitivity analysis and provide a conclusion remark.

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