Course Title: Property Funding and Portfolio Management
Part A: Course Overview
Course Title: Property Funding and Portfolio Management
Credit Points: 12
325H Property, Constr & Proj Mgt
|Sem 2 2006,
Sem 2 2007,
Sem 2 2008,
Sem 2 2009,
Sem 2 2010,
Sem 2 2011
Course Coordinator: John Garimort
Course Coordinator Phone: +61 3 9925 5027
Course Coordinator Email:firstname.lastname@example.org
Course Coordinator Location: 8.8.67
Course Coordinator Availability: to be advised
Pre-requisite Courses and Assumed Knowledge and Capabilities
Capabilities in this course build on those formerly developed in:
- OMGT1122 Investment Evaluation
- ECON1069 Business Forecating Methods
- OMGT1147 Property Investment
This course is divided into two parts.
The first half provides students with an introduction to portfolio theory, property’s rightful role in a multi-asset portfolio and a treatment of the mathematics underpinning conventional mean-variance approach to portfolio selection. Other portfolio related issues that are discussed include various approaches to measuring and attributing property portfolio performance as well as different strategies for the attainment of property portfolio diversification and finally tests of property market efficiency.
Since property portfolio management theory is an application of general finance principles, students revisit elements of finance that they have studied earlier in their degree programme. Students can also expect to gain some exposure to the use of spreadsheet modeling to derive ex-ante as well as ex-post performance measures, to derive efficiency frontiers and to estimate betas.
The second part of the course provides students with an understanding of the various property fund structures that currently operate in the Australian market. Internal and external management options will be reviewed along with the corporate structures under which they operate. A detailed review of the available funding options for these funds will be undertaken as well as an exploration of the various ways in which listed and unlisted funds operate and the different roles they perform for investors. Students will also learn about the sources of capital and the practicalities of securing debt and equity finance. Finally, a detailed review of performance measurement techniques will be undertaken including practical guidance for portfolio construction.
Objectives/Learning Outcomes/Capability Development
Listed below in boldface find all capabilities that this course seeks to cultivate in students. Also highlighted underneath each listed capability find a list of learning outcomes designed to develop this capability.
The ability to undertake and apply research in professional activities
The enabling learning outcome for this capability is:
- an ability to understand as well as critique peer reviewed journal articles in the discipline area of property funding and portfolio management.
The ability to monitor and interpret the impact of changes in the socio-political and economic environments of the property, construction and relevant project sectors.
Here the enabling learning outcomes include:
- a knowledge of the nature of property syndicates and property trusts
- an understanding of the relationship between credit analysis and the nature of finance
- an appreciation of the impact of market conditions on the nature of finance
- a knowledge of what is involved in loan workouts; the situations in which they arise and the implications for all involved parties.
The ability to resolve problems using sound problem-solving methodologies.
Learning outcomes that facilitate the development of this capability include:
- the ability to apply the conventional Markowitz Mean-Variance Framework to property portfolio selection
- practical portfolio construction methodologies
- performance measurement techniques including component analysis, weighted contributions and attribution analysis.
The ability to progress from simple data and information collection towards more detailed analysis, synthesis and evaluation.
Learning outcomes that are linked to the attainment of this capability include:
- the ability to use return data available on single properties or (or for that matter unit prices) to generate return measures for property portfolios.
- the ability to use portfolio performance measures to gauge which property portfolios are performing better than others on a risk adjusted basis.
- the ability to use various approaches to measuring and attributing property portfolio performance.
- familiarity with the ways in which property portfolio performance may be bench-marked
The ability to work as part of a multi-disciplinary team and to positively contribute to appropriate outcomes.
This capability is promoted by:
- team-activity work revolving around a portfolio re-balancing exercise.
The ability to utilize technology to assist professional practice and enhance decision-making capacity.
This capability is fostered by requiring students to demonstrate proficiency for:
- using spread-sheeting algorithms and formulae to enable property portfolio return measurement and risk assessment
Assess and manage risk in a pro-active manner.
This capability is enhanced by requiring students to:
- gain a sound understanding and appreciation of the process of property financing and loan workouts.
- choose among alternative investments in a world of uncertainty
- be equipped with the requisite methodologies and skills to construct a property portfolio that meets given investment objectives in a world of risk.
- be able to compute as well as interpret different quantitative measures of risk
be familiar with different sources and types of property risk.
Overview of Learning Activities
The typical academic week involves a 3-hour class that is organized around a number of activities (lectures and worked-problem sessions) that facilitate learning from a variety of different angles described below:
Team activity-work revolving around a portfolio re-balancing exercise is designed to enhance collaborative learning. This is the synergetic learning that often arises when dialogue among close colleagues focuses on a common academic endeavour.
There will be several occasions when students will not be formally presented ideas by their lecturer. Instead, they will be required to surmount the material on their own (in say an individual assignment). This activity is designed to enhance independent learning and since this is a 12 credit point subject, students should really be devoting up to 9 hours per week on independent reading and the completion of assignment tasks.
On occasions where the course seemingly involves a more traditional passive learning approach (say during lectures), every attempt will be made by lecturers to draw out student questions and commentary during such an address. Hopefully, this will enhance interactive learning.
Finally, the involvement of an industry practitioner will provide a real-world perspective that promotes heuristic learning. (i.e. learning by reference to examples rather than formal theoretic reasoning and proofs)
For some students, one of the greatest impediments to effective learning is the fear of discussing areas of misunderstanding with their instructors particularly if the subject matter is rather analytical and mathematical which the present course happens to be at least in the first part. Such students should cast aside these irrational negative attitudes and approach their lecturers with confidence about any difficulties encountered with the course material. Contact with your lecturers - by email, phone or in person - is actively encouraged. Remember that it is the job of lecturers to enhance student learning and understanding; so keep asking questions until you ’get it’. In other words, students are expected to learn how to be responsible learners.
Overview of Learning Resources
There is no prescribed text for this unit. However, wide use will be made of:
- lecture handouts.
- journal articles from the university library’s serials collection as well as electronic journal articles accessed through the library’s electronic database collections.
- textbooks used in pre-requisite and co-requisite subjects.
- monograph references held at the library.
Overview of Assessment
Assessment will comprise two assignments and one final exam. To obtain a pass in this course one must obtain an overall mark of 50% and attain at least 40% for each of the 3 components of the total assessment.