Case:

Introduction: This assignment requires you to produce a report in order to advise a UK-based pension fund on a strategy for investing their funds. The aim of this module

1. To introduce the methods used to estimate the value of real estate interests and the factors which influence capital and rental values.

2. To enable students to apply this knowledge to develop understanding of the concepts of value, price, risk and return in the international property investment context and to utilise their application within a real estate environment.

This assignment addresses mainly the second module aim. Your first assignment tested your knowledge of the methods used to value real estate interests and the factors that influence capital and rental values.

Learning Outcomes: This assignment is linked to the following learning outcomes:

• Develop and apply using critical analysis an understanding of the principles of financial and investment management evaluating the significance of diversification, risk and return in international investment portfolio management.

• Apply and analyse the capital asset pricing model (CAPM) and modern portfolio theory for the development of a reasoned international real estate investment strategy.

Word Count: The word count for this assignment is 2000 words ± 10%. Your reference list does not count towards the word count. You are strongly advised not to exceed this limit, words beyond the word limit are unlikely to be marked.

Your Task: "Your client is a UK-based pension fund with substantial funds available to be invested following the recent sale of a large shopping centre investment. They are currently considering whether to invest directly in commercial property in Sheffield (UK) or Changsha (China). They also have the option of making an indirect investment in property in the UK or abroad, investing in other asset classes such as gilts or equities or continuing to hold some or all of the funds as cash.

- Your task is to write a report for your client advising them of your recommended investment strategy. You will need to provide justifications for your advice. You will need to make reasonable assumptions regarding your client' investment objectives and also state these assumptions in your report. Within your report you will need to consider the significance of diversification, risk and return.