7L004 Assessment 1 Brief 2025/26
UK RICS Professional Real Estate Investment and Development Appraisal/Valuation Report
I hereby confirm that Generative AI is NOT allowed in the assessment task ☒
Assessment Brief
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Module name
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Investment and Development Appraisal |
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Word or time length guide
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Maximum 3,000 words excluding calculations, reference list, tables, charts and appendixes. A penalty of a 10% deduction in marks will be applied to students going beyond the word count by more than the permitted 10%. Students are reminded to strive for quality not quantity. Students are advised to provide the word count in the title page. |
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Requirements for the assessment |
Your client, Warwick Estates Estate, is considering an acquisition/Re-development of an office building Occupied by a long-term tenant Durr Ltd. The property is currently let and could be held as an investment property, but the lease expiry is imminent by(March 2027). You need to make realistic assumptions on the income and costs of holding the property to arrive at a recommended bid price. The property could be redeveloped for a number of uses. You are to advise on the highest likely alternative use value. This will require you to undertake an Investment (Term and Reversion), Discounted Cash Flow(DCF Method) and a Residual development appraisal. They also want your comment on what sort of investors might purchase the completed development together with your recommendations as to the possible means of funding the development. Your report is required for a board meeting that will take place on the 9th May 2026 at which they hope to make a decision to acquire the property and how to proceed. Full information will be provided via the “Project Folder”. |
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Learning outcomes tested |
To achieve credit for this module, students must be able to:
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Marking criteria
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The assessment will be marked according to the following specific marking criteria: 1. A critical knowledge and understanding of a property investor’s requirements including Market Research. (20%) 2. The ability to prepare and carry out conventional investment appraisals. (20%) 3. The ability to carry out Residual and DCF development appraisals. (30%) 4. The ability to recommend and evaluate funding options. (20%) 5. Ethical and reflective interpersonal communication and understanding of how to format a report and make recommendations. (10%). |
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Special instructions (only include if required) |
IMPORTANT NOTICE: Terms and Conditions This coursework makes use of a real-life client and two actual properties on the market through actual commercial agents. However, under no circumstances should you contact any representatives or employees of this ‘client’ or the agents dealing with the two properties directly or indirectly. Whilst you are encouraged to carry out research and may come across editorial reports that comment and provide opinions of practitioners which, when properly referenced, you are of course welcome to use, you should not ‘cold call’ individual agents, developers and other professionals involved in your chosen properties personally. Doing so antagonises busy fee earners and undermines our attempts to build good working relationships and networking opportunities for placements, work experience and recruitment. Failure by any student to comply with this reasonable condition will be reported in any employer’s request for a reference in respect of that student as a breach of their ability to maintain strict confidentiality. Submission Please note that only Word or PDF file formats can be uploaded to Turnitin. If you use Excel spreadsheets, you will need to ‘embed’ them into Word within your submission to ensure they display correctly.
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7L004 Assessment 1 Brief
You have had sessions on investment and development. The assignment will test your ability to provide appraisals for an investment property (assuming the property is held for income producing with no development), and compare this the option of developing the property. The assignment is based on a property in the market and all your assumptions must relate to the current market. You should not approach agents, but rely on published information to gather data.
This session will look at the basic way to evaluate investment and development opportunities.
Task instructions
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You work for a commercial agency PNR Surveyors and have been asked to provide a report to Warwick Properties on the acquisition /Redevelopment of an office building.
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The property is currently let and could be held as an investment property, but the lease expiry is imminent. You need to make realistic assumptions on the income and costs of holding the property to arrive at a recommended bid price.
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The property could be redeveloped for a number of uses. You are to advice on the highest likely alternative use value. This will require you to undertake and show a development appraisal.
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They also want your comment on what sort of investors might purchase the completed development together with your recommendations as to the possible means of funding the development.
Notes
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You have been given some market information in the agents details. You can supplement this with your own research (ie use Costar /Radius or agents web sites).
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You need to be realistic in your assumptions and should include a summary of key economic factors /risks.
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You need to find realistic build costs (Try BCIS), but can assume a construction period of 1 year. Make sensible estimates for letting voids and use market data to support your rents and yields.
Use the resources available through RAU for mapping tools and construction costs.
Note - for your written Report
Format the report properly front page, Appendices, References, etc
Include Contents Page and Executive summary
Date it!
Be realistic with assumptions.
Note all the risks and make them clear even if you cant solve them yet! Label all tables diagrams etc
Use a SWOT analysis
Make sure you include all your Mkt research and use it to prove your points
Ensure you are responding to all points on the letter of instruction.
Don't forget to reach conclusions and make some recommendations
Property Summary
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Freehold office building with strong underlying development potential The property benefits from excellent connectivity, strategically positioned on Wedgnock Industrial Estate, within the affluent town of Warwick and positioned adjacent to the A46 providing direct access to Junction 15 of the M40
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Located on Broxell Close, with nearby occupiers including Volvo, Royal Mail, Telent Technology and a Shell Recharge Charging Station. There is a Premier Inn directly behind the property which incorporates a Costa Coffee facility and a LA Fitness gym a short distance away ⚫ 29,763 sq ft office which has been the UK Headquarters for Durr Ltd since 2001, with excellent car parking of 110 spaces equating to a ratio of 1:271 sq ft ·
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The buildings are capable of subdivision and floor by floor lettings Let to the excellent covenant of Durr Ltd with Durr AG as guarantor) on a lease expiring 5 March 2027, at a rent of £421,000 pa (£14.15 per sq ft) Provides a high income return and over 2 years to plan refurbishment /reletting /redevelopment on expiry
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Site extends to approximately 0.62 hectares (1.52 acres) and sits within an immediately predominant industrial area, providing redevelopment prospects to industrial use (subject to planning consent)