The Cambridge Finance® Certificate In Real Estate Development & Value-Add Investments Course will equip you with the knowledge to make investment decisions, identify and mitigate risks & deal with the intricacies of property acquisition, management, and disposal. You will discover how to construct a robust financial model to assess the risk and return profile of development, re-development, refurbishment, and value-add investments.

Tailored to give you an in-depth understanding of the development process and the tools to utilise your knowledge in a constructive and informative way and present the information to others.


Details

Duration: 7 days
Location:  London/Online
CPD Hours: 49
Level: General

Course fee: 

Early Bird
plus VAT
Book Early & Save
Book & Pay min. 30 days before course start date
RICS members Virtual Live Course £2,938
RICS Members In-Person Course £3,994
Non RICS Members Virtual Live Course £3,264
Non RICS Members In-Person Course £4,104
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Regular Price
plus VAT
Quality Training
Book and/or pay less than 30 days in advance
RICS members Virtual Live Course £3,233
RICS Members In-Person Course £4,065
Non RICS Members Virtual Live Course £3,592
Non RICS Members In-Person Course £4,516
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 (Payment plan available)

Next Dates:

  • 17-18 & 21-25 February 2022
  • 12-13 & 16-20 May 2022
  • 13-14 & 17-21 October 2022
  • 8-9 & 12-16 December 2022

Please note – Due to Covid regulations, delegates attending our In-Person courses need to bring their own laptop to the course.

If you can’t make the dates or require on demand courses please contact us.


Content


Day 1


Introduction to property development and investment 

  • Property development and investment as a business
  • Market overview & where to find opportunities and the pipeline
  • Development and investment strategies
  • Financial return metrics
  • Real estate economics & cycles – entry & exit planning
  • Exit strategies

Identifying and evaluating investment opportunities

  • Market analysis: The real estate market cycle and investment opportunities
  • Real estate investors: Hight Net Worth Invidividuals, Pension and Other Institutional Funds
  • Valuation for commercial and residential properties
  • Assessing Gross Development Values (GDV), key development costs, professional fees, interest costs and contingencies.
  • Financial analysis: Discounted Cash Flow (DCF), profit on cost calculation, IRR, NPV, equity multiple
  • Maximum bid price for site

Obtaining planning permission and enhancing existing planning permission 

  • Planning permission explained
  • Types of permits (no planning, outline, permitted development, full permission, enhancement potential)
  • Pitfalls to watch for and managing expectations

Structuring the offer for the site

  • Reducing capital requirements: Purchase options explained
  • Delayed completion options
  • Full cash offers
  • Landowner joint-ventures
  • Aligning capital in a bid to offer for the site
  • Landowner taking back 2nd mortgage on site
  • Overage agreements
  • Assessing the legal title and searches

Construction and project management

  • Contracting, monitoring works and phase completions
  • Cost control, overruns and how to deal with budgets
  • Setting up the professional and advisory teams: from quantity surveyors, to architects, accountants, construction companies, financial modelling & control, joint-ventures partners, solicitors and lawyers, and tax advisors
  • Sourcing, engaging and motivating the team

Day 2


Funding and financing the real estate project

  • Sources and types of funding available: rates, sample terms and investment structures
  • Principles of corporate finance: picking the right capital structure to fund the property development project
  • Forward funding
  • Typical senior debt terms and structures
  • Typical mezzanine debt terms and structures
  • Sourcing additional equity
  • Inter-creditor and shareholders agreement
  • Basics of development loan structures
  • Lending criteria and typical capital structures
  • Lending fees

Introduction to UK Taxation of Real Estate

  •        Principles of taxation for real estate
  •        Property taxes and financial returns
  •        Taxes on acquisition, development, occupancy and disposal
  •         Off-shore versus on-shore companies’ taxation

Exit options, sales, marketing strategy and tactics in practice

  • Marketing and client segmentation
  • International investors and marketing overseas
  • Marketing strategy and tactics for your project
  • Estate agents: structures, hiring and firing
  • Structuring offers for buyers
  • Controlling sales and marketing budget

  Sustainability in real estate

  • The value of green buildings
  • Sustainability certifications
  • Environmental, social and governance for development and investing
  • Well-being in real estate

Property Management

  • Property management requirements and strategies
  • Asset management plans, processes and control techniques

Case study:

Value-add development in West London


Day 3


Residual Valuation Appraisal

Property Yields

Land Value

Profit Appraisal

Gross and Net Development Values

Return on GDV, Cost and Equity

Pro-forma development cash flow 

Inputs:

  • Timings: purchase date, works start date, planning, lead in, construction and refurbishment, void period, lease start, sale date
  • Revenue: sales proceeds, estimated rental value per sqf, net internal areas, rental growth and target returns
  • Development Costs: construction and refurbishment, site purchase and vacant possession value, contingency, professional fees, statutory costs, allowances and rights
    • S-Curve vs. Straight Line

Outputs:

  • Internal Rate of Return (IRR)
  • Net Present Value (NPV)
  • Maximum Bidding Price
  • Total profit, profit on cost and equity multiple

 

Financial viability testing & risk analysis

Data tables & sensitivity analysis

Risk visualisation techniques

Case study: un-geared office redevelopment in the UK


Day 4


Development finance

  • Debt & Equity Structures
  • Senior Debt
  • Mezzanine Loan

Geared cash flow

Debt Types

  • Rolled-up interest senior debt
  • Equity first capital deployment waterfall
  • Debt repayment structures for development finance

Joint-venture structures

  • Equity waterfall structure
  • Preferred returns
  • Promote Cash Flow

Capitalised interest & circularities

Case study: geared office redevelopment in the UK


Day 5


Best practice in financial models

  • Simple tips to help you become an efficient financial modeller
  • How to avoid errors and present your models in a persuasive way

Implicit investment valuation methods

  • Term & Reversion
  • Layer / Hardcore
  • Property yields
  • Defining term and reversionary yields
  • Calculating the equivalent yield

Build your cash flow from scratch

  • Inputs: passing rent, estimated rental value, initial and exit yields, market growth, review cycles and most importantly, target returns
  • Outputs: internal rate of return, net present value and worth
  • Annual and quarterly discounted cash flows: modelling purchase price, passing rent, rent reviews, exit rent and exit price

Gearing / Leverage

  • Adding senior debt “bullet” loan

Analyse the results

  • IRR, NPV and Worth
  • Data tables & sensitivity analysis
  • Risk visualisation (charts)

Case study:

  • Single-tenant office building in the UK

Day 6


Multiple tenant properties

  • Modelling tenancy schedules and rents forecast
  • Rent reviews, upward-only, break options, lease expiry
  • Modelling hypothetical second leases
  • Void period, rent free and estimated rental values

Time-varying rental growth

Net Operating Income Forecast

  • Modelling capital expenditure for refurbishment and operating costs (letting fees, void costs, empty rates)

Investment decision

  • When to accept the project and make investment recommendation

Case study

  • Multi-tenant office building in the UK

In-Person : Day 7


Lead-in period

  • Current in-place leases, operating expenses – vacancy costs, including rates and empty costs
  • Site acquisition including options, pre-development and planning costs
  • Equity and debt drawdowns, including mezzanine finance

Construction period

  • Development hard and soft costs using S-curve, Straight line and Known curves
  • Construction finance drawdowns following an equity-first model

Lease-up and stabilisation period

  • New leases with gross and net lease clauses
  • Tenant incentives such as rent-free and capital expenditure contributions
  • Operating expenses – delayed rates, letting fees, service charges and void costs

Investment options modelling

  • Lease re-gearing, hold or sell
  • Re-develop, refinance and hold
  • Re-develop, stabilise and sell

Sources of funds

  • Calculating debt and equity peaks
  • Modelling the debt repayment waterfall
  • Calculating total cost of debt (interest and fees)

Carried Interest / Promote Structures

  • Profit shares and preferred equity returns
  • Equity returns based on different IRR tiers

Risk modelling and presentation

  • Sensitivity analysis (2-way data tables)
  • Scenario analysis
  • Financial ratios: IRR, NPV, Residual Land Value, Profit on Cost, Profit on GDV, Equity Multiple