This book is about creating and adding value through the effective management of property assets. It aims to raise the level of understanding of financial and economic principles within the property profession and also shows that property is an important part of capital markets. A unique feature of the book is its extensive use of empirical evidence, with ideas supported by research that has been undertaken using real property data. In addition, the authors have explored new areas by pushing back the boundaries of research, to encourage debate and provide a framework for the development of new ideas.
PART 1: THE TIME VALUE OF MONEY AND THE VALUATION OF CASH FLOWS.
1. Valuation and financial theory: bridging the gap.
2. Valuing cash flows.
3. Simple freehold valuation models.
4. Simple leasehold models.
5. Mortgages and amortisation.
6. The term structure of interest rates.
7. Valuations and prices.
8. Investment decision techniques.
PART 2: RISK AND RETURN IN REAL ESTATE.
9. Distribution characteristics of real estate returns.
10. Risk, return and diversification.
11. Constructing property portfolios.
12. Valuation smoothing.
PART 3: PORTFOLIO MANAGEMENT.
13. The efficiency of the property market.
14. Hedging against inflation.
15. Developing a portfolio strategy.
16. Performance measurement.
17. Quantitative techniques.
18. Some unanswered questions.