As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase an income-producing property. You must identify an income-producin

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As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase an income-producing property. You must identify an income-producing commercial property (office, retail or industry) that is still in the market or recently sold (as recent as January 2022 to date) and obtain the information for the property as follows:

  1. Property Data- purchasing costs-legal fees etc.
  2. Income Data-vacancy rate, current rent, fixed operating expenses, variable expenses etc.

There are 5  parts of this report:

Part 1: Introduction You should provide the identification of the property. It includes the description information of the subject property.

Part 2: Property Market You should review the property market in the past 5 years. This would include vacancy rate, price, demand, supply, rental, incentives, investment activity and yields. You should also review key market fundamentals such as the Australian GDP, cash rate or lending rate, population, unemployment level, and inflation.

Part 3: Mortgage Requirements You are also required to obtain the information of your client’s mortgage requirements. Identify the amount of loan that is required, term and repayment frequency and interest rate. Based on the information, calculate the loan repayment. Compare offers from at least three lending institutions.

Part 4: Investment Analysis By using the collected data, conduct a detailed investment analysis. The analysis should include:

  1. A discounted cash flow,
  2. IRR and NPV on property,
  3. The impact of debt financing,
  4. The optimal financing strategy

Part 5: Conclusion You should summarise the key findings. Recommendations should also be given.

As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase an income-producing property. You must identify an income-producin
FINC3009 Property Finance – SPRING 202 2 Assignment – Guidelines Part 1: Introduction Identify an income producing commercial property ( office, retail or industrial ). The information could be identified via RPData or websites such as realestate.com.a u , CoreLogic etc). Part 2: Property Market § Information for the review of market fundamentals can be found from the websites of the Australian Bureau of Statistics (ABS), Reserve Bank of Australia (RBA), journal articles, professional magazines, and property agencies such as Property Council of Australia . § For local m arket review of property parameters , in addition to the sources above, information can be found from the reports of several property companies such as Jones Lang LaSalle, Knight Frank , CBRE etc . Part 3: Mortgage Requirements We acknowledge that getting the actual lending rate for a commercial investment property is often negotiable with the lending institution. Because of this constraint, you c ould explore the use of business lending rate from at least three lending institutions to discuss the different loan opti ons . You are required to discuss the different loan options and give your recommendation (fixed or variable interest rate; fully amortising or interest – only). You need to calculate the mortgage repayment s for at least 3 lenders as well. See the textbook (chapters 3, 4 and 6) or P owerPoint slides (see Weeks 4 – 6). Please check with major banks regarding interest rates, loan options etc. Part 4: Investment Analysis § A discounted cash flow – you need to project a DCF on property (without financing) – See the PowerPoint slides of Weeks 7 – 8 and the textbook (chap ters 9, 11 and 12) § Based on the DCF – you should able to calculate the IRR and NPV on property; discuss the results. § The impact of debt financing – project a DCF on Equity before tax; calculate the NPV and IRR on equity; discussion. § The optimal financing strategy – comparing different debt financing strategies and identify the optimal strategy. Examples will be given in the lecture and be available online (vUWS). Part 5: Conclusion You should summarise the key findings. Recommendations should also be given; should the property be purchased? How should it be financed?
As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase an income-producing property. You must identify an income-producin
FINC3009 Property Finance Assignment Details Due Date: Friday , 7 th October 20 2 2 Weighting: 5 0% As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase an incom e – producing property. You must identify an income – producing commercial property (office, retail or industry) that is still in the market or recently sold (as recent as January 2022 to date) and obta in the information for the property as follows: a) P roperty D ata – purchasing costs – legal fees etc. b) Income Data – vacancy rate, current rent, fixed operating expenses, variable expenses etc. There are 5 major parts of this report: Part 1 : Introduction You should provide the identification of the property. It includes the description information of the subject property. Part 2 : Property Market You should review the property market in the past 5 years . This would include vacancy rate, price, demand, sup ply, rental, incentives , investment activity and yields. You should also review key market fundamentals such as the Australian GDP, cash rate or lending rate, population, unemployment level, and inflation. Part 3 : Mortgage Requirements Y ou are also req uired to obtain the information of your client’s mortgage requirements . Identify the amount of loan that is required, term and repayment frequency and interest rate. Based on the information, calculate the loan repayment. Compare offers from at least three lending institutions. Part 4 : Investment Analysis By using the collected data, conduct a detailed investment analysis. The analysis should include: a) A discounted cash flow, b) IRR and NPV on property, c) The impact of debt financing , d) The optimal financing strategy Part 5: Conclusion You should summarise the key findings. Recommendations should also be given. Assignment Requirements Although t here is no page limit, thi s assignme nt should not exceed 2,5 00 words with using 12 points font size and 1.5 spacing. Please refer to the suggested format as stated in the marking guide. The submission of the assessment MUST be done via the Turnitin link provided on vUWS and must be accompanied by a signed assignment cover shee t. T he soft cop y of all related E xcel calculations Must also be submitted via the Turnitin link . However, it is essential that the body of the report discusses and reports the results of DCFs and does not si mply say ‘refer to information in the E xcel file ’. For the avoidance of doubt, although referencing and acknowledgements 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 day late.
As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase an income-producing property. You must identify an income-producin
FINC3009 PROPERTY FINANCE – SEMESTER SPRING 202 2 MARKING CRITERIA Description Possible Marks Awarded Marks Introduction: Is the subject property clearly identified? 10 Property Market: Does this section provide a full picture of the property market? 20 Mortgages Requirement: The client’s mortgage requirement is clearly explained? 10 Investment Analysis DCF NPV & IRR DCF on Equity (Financing) The Optimal F inancing S trategy 40 Conclusion: Conclusions and Recommendations 10 Citation of references and sources: Reference to sources of information; Is it Harvard style? 5 Format: As suggested? 5 Total 100
As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase an income-producing property. You must identify an income-producin
Data Collection Table for Ass essment 1 Category Amount/Value Frequency Possible Source (s) A: Property Details Asking price ($) Use the real estate websites provided on vUWS Current rent ($) / meter – square Use market rent from real estate websites or report /publications by property compa nies Rent review (#) /year(s) 2 – 5 years for commercial property Management fee (%) of EGI Use 5% – 7% of the Effective Gross Income (EGI) Strata fee ($) /quarter Check for strata fee in the location of the subject property Council rate ($) /quarter Check the local council website of the subject property Water rate ($) /quarter Check from Sydney Water or similar company in other states Capital expenditure ($) /year Use 10% – 20% of the NOI or 1% – 2% of the market value of the subject property B: Market Information Rental growth (%) /year Check real estate websites or report/publications by property companies Expense growth (%) /year Check property companies’ report or calculate average CPI /inflation in the last 5 years Vacancy rate (%) /year Check from real estate websites or report/publications by property companies Incentives /year Check from real estate websites or report/publications by property companies Current cap rate (%) Use the NOI in the first year and divide that by the asking price of the property Capital growth (%) Use the long – term GDP growth rate ( average real GDP growth in the last 5 years) Discount rate (%) You can use current cap rate + capital growth rate OR risk free rate + risk premium Terminal cap rate (%) Current cap rate plus 50 to 100 bps ( mostly higher than the current cap rate) C: Capital Outlays Purchase price ($) Use the value from Part A Stamp duty ($) The formula will be provided in the DCF Excel fi le Transfer fee ($) Do some research Legal fee ($) Do some research Total capital outlays ($) Purchase price + Stamp duty + Transfer fee + Legal fee D: Others Selling expense @ 2% Usually 2% of the selling price

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