AIMS AND CONTENT

LEARNING OUTCOMES

The course provides the basics elements on cost-benefit analysis and knowledge on methodologies for the valuation of investment projects. Attention is dedicated to net present value, internal rate of return, payback period and profitability index so to take into account cash flows (costs and revenues) over time as well as techniques for the management of risk and uncertainty with applications to case studies for the valuation of real-estate construction, renovation, investment and management.

AIMS AND LEARNING OUTCOMES

Attendance and participation in theoretical lessons and exercises will allow the student to:
• recognize what are the costs and benefits related to a real estate investment project (new building or recovery/renovation project);
• estimate, through the appropriate methodologies, the costs and benefits over time deriving from a real estate investment project;
• evaluate the economic and financial feasibility of the investment also for the purpose of selecting the best alternative option;
• recognize and evaluate the effects produced by the main project variables on the economic and financial feasibility of a real estate investment project;
• draw up an economic-financial feasibility report relating to the real estate investment building project assigned as a case study by the teacher or proposed by the student.

TEACHING METHODS

The module is divided into lectures on theoretical and operational tools for assessing the economic feasibility of interventions and classroom exercises.

Student attendance is recommended.

For the purpose of the exam, each student will have to develop and deliver the Cost-Benefit Analysis of the case study assigned by the teacher or proposed by the student.

Working students and students with certification of SLD, disability or other educational needs special to contact the teacher at the beginning of the course to agree teaching and examination methods that, in compliance with the objectives teaching, take into account learning methods individual.

SYLLABUS/CONTENT

The module is divided into two parts.

The first part will deal with the theoretical tools for estimating the costs and benefits deriving from the building intervention with particular reference to the characteristics of the real estate market, the types of investors, the financial mathematics tools useful for evaluating the costs and benefits in the time.

The second part of the module will deal with the Cost-Benefit Analysis technique from a private perspective and the main indicators for evaluating the economic and financial sustainability of real estate investments, in particular: Economic and financial Net present Value (NPV); economic and financial Internal Rate of Return (IRR).

An example of an economic-financial evaluation of a building intervention will then be developed through the application of a Cost-Benefit Analysis and presented the case study on which students will have to develop a similar evaluation.

RECOMMENDED READING/BIBLIOGRAPHY

• Boardman, A.E., Greenberg, D.H., Vining, A.R., Weimer, D.L., 2016, Cost-Benefit Analysis: Concepts and Practice, 3rd edition,  Upper Saddle River, New Jersey: Pearson Prentice Hall. Brown G.R., Matysiak G.A., 2000, Real Estate Investment – A Capital Market Approach,  Financial Times Prentice.
• Kahr J., Thomsett M.C., 2005, Real Estate Market Valuation and Analysis, John Wiley & Sons, Inc.
• Linneman P., 2004, Real Estate Finance and Investments: Risks and Opportunities, Linneman Associates, Philadelphia, PA (United States).
• Mooya M.M., 2016, Real Estate Valuation. Theory. A Critical Appraisal, Springer.
• Peca S. P., 2009, Real Estate Development and Investment. A Comprehensive Approach , Wiley & Son Inc., New Jersey.
• Peijie Wang,  2001, Econometric Analysis of the Real Estate Market and Investment, Routledge, London.
• Ruegg T., Marshall H., 1990, Building Economics. Theory and Practice, Springer Science+Business Media
• Seeley I.H., 1996, Building-economics - four edition- , Palgrave, McMillan.

TEACHERS AND EXAM BOARD

Exam Board

PAOLO ROSASCO (President)

ALESSANDRO CANEVARI

LESSONS

LESSONS START

First semester of acedemic year (end of september).

Class schedule

The timetable for this course is available here: Portale EasyAcademy

EXAMS

EXAM DESCRIPTION

The exam is in written form and consists of a test with four questions (open questions or calculation exercises) relating to the topics covered in the module.

The time for the test is 2 hours.

There will be 3 sessions in the summer session and 3 in the winter session.

To access the exam, the student must deliver the tutorial on the Cost-Benefit Analysis of a real estate investment assigned by the teacher or proposed by the student.

ASSESSMENT METHODS

The exam will verify the student's acquisition of the methodologies for assessing the economic and financial feasibility of building interventions.

The overall evaluation of the module will take into account both the results of the written test and the exercises developed individually by the students.

In particular, the student must demonstrate that:

• recognize the costs and benefits deriving from a real estate investment project (new construction, renovation, etc.);
• knowing how to estimate the costs and benefits deriving from a real estate investment project;
• knowing how to apply the evaluation tools (Cost-Benefit Analysis) to verify the economic and financial sustainability of a real estate investment project;
• knowing how to identify and evaluate the main variables that affect the economic and financial feasibility of a real estate investment project.

Exam schedule

FURTHER INFORMATION

The student can propose, as a case study on which to develop the Cost-Benefit analysis, a project developed in the design courses.