Course Outline

DAY ONE
REAL ESTATE AS AN INVESTMENT

Real Estate Background:

• Real estate investment and management within the larger global economy
• Types of property (including land) and their performance
• Factors impacting real estate performance by sector (interest rates, exchange rates, GDP growth, FDI, etc)
  CASE STUDY: Distribution of property by type and performance in Australia by comparison to key East Asian markets – how many hotels, how much office space, how much residential for let? Where would you rather have invested?
• Real estate performance correlation with other assets (bonds, stocks, commodities)
• Real estate ownership in Australia and East Asia – stock markets and family investments
• Valuation theory And Applications
  Examples of Land and Property Valuations in the region – including differences between jurisdictions
• Property taxation, valuation, and legal framework.
  CASE STUDY: Negative gearing, good or bad?
• Key stakeholders within the property industry
• Property professionals and their role
  CASE STUDIES: The Royal Institute of Chartered Surveyors and the Urban Land Institute

Real Estate Strategy:

• Principles of property management within the built environment and a business environment.
• Private and public strategy for the management of property resources within an operational plan.
  CASE STUDY: Government real estate planning, institutions and strategies in Australia and the region
• Application of legal and planning restrictions on asset enhancement
• Corporate property strategy
  CASE STUDIES: The impact of Government at Federal and State level on property investment strategies

Financing Property Purchase:

• Senior, junior and mezzanine bank loans for property investment
• Amortising vs bullet and balloon loans
• Calculation of bank leverage and the role of SPVs (LTV, DSCR, ICR and other measures)
  CASE STUDY: Analysing and comparing bank lending proposals
• Cash flows; depreciation; investment tax credits; after-tax cash flow
• Equity investment objectives (IRR, MIRR and other measures)
• Cashflow waterfalls and their importance
• Examples of Excel financial models for real estate investment analysis – different classes of investment
• How to audit financial models for investment analysis
• ARGUS DCF Investment valuation software demonstration
  GROUP EXERCISE: Building a financial model for a bank lending proposal

DAY TWO
THE OWNER AND THE TENANT

Property and Conveyancing Law:

• Legal principles, structure, court, and devolution
• Legal issues for property professionals
  Examples of legal issues for property investment
• Law of contract
• Law of Tort, nuisance, and negligence
• Land law, property rights and obligations
• Applied property law, legal issues in building and construction, planning and development, liabilities for owners/occupiers
  CASE STUDY: Strata title vs Leasehold – advantages and disadvantages
• Islamic property financial structures and legal issues
• Mortgage Law components
  CASE STUDY: Australian mortgage law compared to other Asian jurisdictions: similarities and differences
• Differences in real estate law between Gulf and Western jurisdictions
  CASE STUDIES of real estate law and legal decisions in Australia and the region

All About Leases

• Nature and creation of leases
• Differences between types of commercial property leases
• Commercial leases and statutory control.
• Residential tenancies and statutory control.
• Structure of leases e.g., length of the lease period; including options for tenant alterations and expansion
  LEASE CALCULATIONS (with worked examples and exercises)
• Rent reviews and lease renewal options
• Covenants to leases e.g., repairing liability, occupancy conditions, subleases, termination, service charge provision

Tenant Management:

• Qualifying the prospective tenant financially.
  CASE STUDIES: Do Ratings Work?
• Marketing considerations for office buildings – understanding the market, building a marketing plan, measuring marketing efficiency
  GROUP WORK: Auditing a lease marketing proposal
• Advertising and public relations; how to get referrals; canvassing for tenants; preparing a rental sales plan
• Security deposits and other negotiation issues
• Inspections
• Effectively handling inquiries and complaints
• What to incorporate in tenant and director’s meetings
  GROUP WORK: Handing tenant negotiations
• Housing and tenant management.

Operational Property Portfolio Planning:

• Master, action, and project planning
• Change management and relocations
• Selling property
  GROUP WORK: Preparing a sales marketing plan for a commercial property

Financial Management Principles:

• Reporting procedures in the management of different kinds of properties
• Preparing profit-and-loss statements
• Tax implications; tax records; and the management of tax issues for real estate investment
• Risk management and how to obtain proper insurance.
• Accounting theory and methods
• Asset and liability valuations
• Budgeting and cash flow analysis
  CASE STUDIES: Principles of real estate management budgets
• Decision making based on cost data; industrial, commercial and property finance; ratio analysis
• Presentation to clients and management of client’s accounts
  CASE STUDY: Financial management – outlining a property’s sources of income and types of expenses and how they are accounted and reported

Business Management:

• Strategic business planning processes
• Business life cycle
• Analyzing industry trends
  Examples of real estate investment and occupancy strategies for companies in Australia and the region
• Accounting and monetary practices
• Insurance

DAY THREE
BRICKS AND MORTAR, ASSETS AND FUNDS

Property Life Cycle Planning:

• Establishing asset management objectives
• Implementing asset management functional activities
• Key asset management elements
• Calculating the cost of facilities over the property life cycle
• Assessing facility performance requirements over the property/asset life cycle
• Identification and diagnosis of building defects
• Inspections and defect surveys leading to the preparation of reports for dilapidations; cyclical schedules; schedules of condition on letting property and pre-acquisition reports

Property Management:

• Introduction to property management
• History of the profession – key property management companies
  CASE STUDY: What do property managers do?

Facilities Management

• The real estate manager’s role in increasing energy efficiency
• Methods to increase a property’s energy efficiency through operations and maintenance, equipment and technology, and tenant and resident education
  Examples of methods to assess a property’s energy use and supply
• Methods to increase a property’s water efficiency through operations and maintenance, equipment and technology, and tenant and resident education
• Methods to improve the indoor environment at a property through operations and maintenance, equipment and technology, and tenant and resident surveys and education
• Methods to reduce, reuse and recycle that result in financial and environmental benefits
• Information systems and technology
• Statistics and management reporting
  CASE STUDY: Property management software comparison
• Intellectual property and IT legislation
• Telecommunications
• Property and facilities management support systems
• The personnel need of managed properties
• Strategies for hiring and retaining employees
• Property inspections, work schedules, and different types of maintenance work.
  CASE STUDY: The limits of preventative maintenance
• Environmental issues
• Pest control
• Third Party Safety (Customer/Tenant/Visitor)
• Fire safety
• Safety and insurance

Contracts and Outsourcing:

• How to determine the appropriate services to be outsourced
• Service Level Agreements (SLAs)
• Implementing SLAs
• Measuring service performance
• Managing SLAs
• Preparation of tender documentation and the selection process
• Arranging and administering the contracts

Sustainability and Real Estate Management:

• Green Building occupation, management, and value
• The balance between social, environmental, and economic objectives in context of the built environment
• Historical background and climate change and how sustainability affects property, energy efficiency, access, and flexibility
• Threats to sustainability and concerns from stakeholders
• Measurement of sustainability including BREEAM, LEEDS, EPCs, DECs and understanding the Triple Bottom line.
  CASE STUDY: Designations, certifications, and accreditations that demonstrate adherence to sustainable business practices
• Sustainability and investment, financial impact of sustainability and incorporation into valuation IFRS integration of ESG, and RICS guidance
  CASE STUDY: ESG reporting for real estate under Australian and international regulations
• Ways in which sustainable property operations are integrated into management plans
• How to incorporate sustainable maintenance practices into property operations to help the property achieve its sustainability goals and reduce impact on the environment
• How to develop ways to attract and retain tenants and residents who desire green space, as well as methods to ensure tenants and residents help the property achieve its sustainability goals
• Choose sustainable options for tenant improvements and renovations at a property
• Ways to reduce the financial and environmental impact of transportation associated with a property

Ownership Forms and Goals:

• Ways investors can own real estate and their expectations for this type of investment.
• The role of real estate funds

Real Estate Investment Trusts (REITS):

• Introduction to REITs
• Origin and Development of REITs
• Criteria for REITs
• Comparison with ordinary listed real estate companies
• US REITS, A-REITs and equivalents in Japan, Singapore, and other jurisdictions
• Types of REIT: the Equity REIT, Mortgage REIT, UPREITs
• Current Issues in the REIT market in Australia and the region
  CASE STUDIES: Examples of Australian and other regional REITs and their varying success
• Pricing and Investment in REITs
• Earnings – what to look for
• How to price a REIT
• REIT pricing in practice
• Liquidity and Premia to value
• Evidence on international investment in REITs
• REITs Structuring Issues
• Tax Issues
• Accounting for REITs
• Issues in REITs investment
• The future for REITS

Portfolio Analysis:

• Comparison of risk–return profiles of real estate and financial investment assets
• Measuring investment performance
• Principles of portfolio diversification
• The case for active portfolio management
• Application of property within a larger non-property investment market.
• The nature of risk and return from property compared with bonds and equities.
  CASE STUDIES: Portfolio management and property investment – how much property should a fund hold?