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Outline for PGDM (IM) 2017-18

Adani Institute of Infrastructure Management (AIIM)


2017-18
Real Estate Finance (Elective)
Programme: PGDM (IM)

Instructor: Aditya Sharma


Contact Information: email: Aditya.sharma2@aiim.ac.in, mobile: 7096011144

Trimester: 6
Course Credit: 1.5
No. of Sessions: 12 (tentative)
Duration of each session: 75 Minutes

Goals and Objectives:

Real estate investment decisions are made from applications of an extended version of the
after-tax discounted cash flow model and other valuation models, including option pricing and
regression models. Financing decisions are made using the techniques of modern financial
analysis. This course is an introduction to the most fundamental concepts, principles,
analytical methods and tools useful for making investment and finance decisions regarding
commercial real estate assets. The course focuses on the basic building blocks and the
"micro" level, which pertains to individual properties and deals. At the same time, the course
also touches upon sound real estate investment and finance decision making through the use
of advanced theory and techniques in financial economics.

References and Reading Materials:


 . Distributed Material

Attendance Policy: As per AIIM norms

Evaluation:

Class Participation 10%


Quiz 20%
Assignments/Project Work/ Case 15%
Reports/Pre-Class Submissions
Presentations 10%
End term Examination 45%

Pedagogy:
With emphasis on individual and collaborative learning, the course will be taught through the
case method. For every topic, the background reading material will be provided and a case
will be used for class discussion.

Course outline of Real Estate Finance for 1.5 credits prepared by Aditya Sharma
Outline for PGDM (IM) 2017-18

Session-Wise Schedule:

Session 1 Introduction Chapter 1 and 7

Session 2 Time Value in Real Estate Chapter 2

Session 3 Micro Level Valuation of Real Estate Chapter 2 and 10


Case – I (Time Value of Money : The Buy vs Rent
Decision)
Session 4 Micro Level Valuation of Real Estate (cont.) Chapter 2 and 10

Session 5 Real estate cash flows, proformas Chapter 11


Case – II (CADIM: China and India Real Estate
Deals)
Session 6 Real estate opportunity cost of capital and Chapter 11 and 13
Leverage,
Case III (The Trouble with Lenders)
Session 7 WACC formula and After-tax cash flows in Real Chapter 14
Estate
Session 8 After-tax investment analysis and capital Chapter 14
budgeting in Real Estate
Session 9 Mortgage basics in Real Estate Chapter 3 and 17
Case – IV (The Bourland Companies)

Session 10 Project level capital structure Notes

Session 11 Real options and land value Chapter 27


Case – V (CITIC Tower II)

Session 12 Real options and land value (Cont.) Chapter 27


Case – VI (CLM: Real Options and Store Expansions)

Course outline of Real Estate Finance for 1.5 credits prepared by Aditya Sharma

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