Real Estate Investment And Development Assignment Sample

Performance Measurement & Risk Evaluation in Real Estate Investment

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Introduction Of Real Estate Investment And Development Assignment

It has been observed that real estate belongs to the category of old and common assets across the globe. The development and investment in the real estate field are comprised of purchase, sale and management aspects for profit. Investment and development share two distinct degrees of momentum with respect to the real estate field. The investment aspects have retained a straightforward nature and the development aspects have reflected the purchase, sale and management of real estate projects. In contrast to the scenario of the pandemic and uncertainty of the stock market, board of directors of universities has concentrated on engaging with real estate-based funds.

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Therefore, this study has been critically focused on exploring and discussing the investment strategy and portfolio development with respect to real estate property. Along with that, this study has also focused on the risk evaluation and performance measurement over the investment portfolio.

Development of an investment strategy

The investment strategy is set to rule and improve the behaviour that processes to improve and make the improvement in developing the strategies with long-term diversification. It is being set to reduce and make the improvement in the organisation by analysing the portfolio and investor selecting inventory development (Fabozzi et al. 2020). Moreover, the development strategy is applicable to make the credential in the overall dignity to cooperate with the developing world that is making the investment and supporting the countries to make development. The overall standard is being set to divide and support the goal of the organisation to meet long-term sustainability. Long-term strategies are being set to make the modifications that is applicable to choice and maintain the dignity in business [Refer Appendix 1]. Growth investing is applicable to making the selection of the companies that have expected to meet the overall growth with the average rate for the long term and increase the price higher (Hoesli and Malle, 2022). It is making the growth investment with the technology stock that is being built up to enhance the emerging market and set the goal for the organisational behaviour. Value investing is making the market overreact to the good and bad news that is being set to maintain integrity and result in a positive environment with long-term and rising prices by higher stocks.

It maintains dignity by improving the overall staff with the investor by stocking up prices with low sellers to increase the value. It is important to buy the applicable stock to improve the stock price and long-term outlook. Quality investing is focusing on the development and certainty in the business that is applicable to set and enhance the growth in the business (Nanda et al. 2021). A quality portfolio is being set to maintain the dignity of the business and achieve sustainability. It is applicable to set and improve the overall standing of the assets that are being held to improve the portfolio and meet the market and improve the overall dignity for long-term growth. It is applicable to make the return on the growth and value attribution to make the market return. It improves the overall sustainability and increases the profitability of the business. Buying and holding of investing is focusing on purchasing securities for a long period to achieve returns (Jacobs, and Manzi, 2020). The set of principles that guide the investment design is making the following changes with the different investing plans depending on the risk tolerance and long-term financial goals that access the capital and investing strategies with flexibility.

It is improving the overall performance with the strategic plan that is being executed to make flexibility in the changes to improve the overall stability and growth of the business. Making the flexibility in the business applications to enhance the changes and get a taxable event. It is applicable to improve the overall standard by dropping the value and understanding the role of enhancing the Power Shell standard (Baum, 2021). Moreover, sustainability is maintained by achieving dignity in the business to make a long-term expense with overall changes. The investing strategy is being set to predict the overall standard and make the investment in a portfolio. It is required to maintain the dignity of the business to make investments in the portfolio. The strategy changes are making the assets improve the buying and selling of those assets (Raco et al. 2019). It is having the investing for the thumb rule and making the basic question that is applicable to boost the alternative and developing the investing strategies through retirement accounts. In order to access and open individual accountability, growth, and diversification are being set to predict the IRA and make the strategic changes applicable to achieve the goal.

The buy and hold strategy is making the overall performance to achieve the definitive work. it is being raised to make the investment and drop the value of the market. The improvement in the business is required to raise the value, set a short-term decline that is applicable to the access, and evaluate the basement with long-term growth and prospect upfront. The holding in investment has the time to make the return and have active trading strategies (Hassan et al. 2020). Bold and hold investment is making the frequent changes that are required to solve and increase the price of the distressed company that is making the mergers and acquisitions in the business. It is required to improve the bankruptcy that is being set to maintain dignity and solve the issue of the organisation. Active trading is applicable to improve and swing the spread of standard work that is eligible to solve and seek the movement through the changes that are affecting the driven and strategic changes with the standard work.

It is required to maintain a sign in the business to solve the merger and acquisition that is failing for bankruptcy. The dollar cost is making the average spread with the investment approach that is required to run and maintain the dignity of the business. Moreover, dignity is set to predict the overall performance and stability of the business. The active and passive approach for investing in mutual funds with exchange-traded funds is for the investment portfolio (Charles, 2020). The fund is applicable to accessing and collects the securities in general stocks and bonds. It is required to manage handpick of certain investments to make the popular funds and improve the propriety of the funds to make the corresponding index in bench marking.

Investment strategy

Inventory has to construct the portfolios by making the investment strategies with the systematic approach that is applicable to make the credentials in the business growth. It is required to design the evolution of changes with the practices that are being developed in business to improve the overall dignity and achieve sustainability in business (Hoesli and Malle, 2022). The portfolio is making the duration and expectation for the cash flow distribution to achieve standard and dignity in the business. It has set the parameters for achieving the goal and making the credentials in the business [Refer appendix 2]. The overall standard is achievable with the convexity and credit allocation. It is making the development with the changes and attending a performance (Fabozzi et al. 2020). The long-term debt and debentures are applicable for the large relative position in currencies that is equally important. It is required to meet the expectations for business development that having a higher and lower interest rate.

The large relative position is being set to enhance the dignity of the bones and meet the expectation for the lowering of the interest rate and credentials in the business. It is applicable to making the changes with the implicit and making the changes in the extreme durability of the forecasting (Jacobs and Manzi, 2020). The expansion is credited with the growth and overall sustainability of the business. Moreover, it is important to enhance the dignity of the business by achieving the standard work to meet the credentials of the business and achieve its growth potential. A pixel to set and improve the overall standing with the long-term sustainability and benchmark helps to represent the expenses and growth in the organisation. Moreover, the portfolio is making the experiences in the overall dimension of the organisation (Nanda et al. 2021). It is improving the credentials to achieve the performance that helps to determine and hence the rapid changes and investment in the business.

It has a long credit response that is increasing the demand for portfolio and management strategies to get the experience for future development and strategic changes. Overall, the performance is being made with the credentials in the business that is required to meet the expectations of the business (Baum, 2021). It is increases the overall standard and credibility by experiencing the impact on asset managers and providing market opportunities for the portfolio to grow. The impact on the performance is being set with the credential that is achieving the standards and making the overall impact on the organisational performance (Raco et al. 2019). The improvement in business is being set for the target population to meet the credential for the business growth. It is applicable to meet the expectations to overcome the dignity of the business. The financial parameters are set to determine the incitement and credibility of the business to achieve strategic changes.

Performance measurement and risk investigation

The decision to invest is the core factor associated with the performance measure of the portfolio and 3 distinct tools of performance measurement have emerged with it. Those three tools of portfolio evaluations and risk identification are Treynor and Jensen measure and the Sharpe ratio. It has been observed that portfolio return is connected with the real estate field without evaluation of adjusted returns and the investors (Hofman and Aalbers, 2019) can gain risk, a clear scenario of investment. It has been observed that indices with respect to the investment portfolio provide a reliable method to estimate the growth of the real estate project. The indices project the rate of property in contrast to the index captures depending upon a certain degree.

Treynor Measure

This type of performance measure has presented the notion of the "Security market line" in terms of defining the relation between market rates of returns and portfolio returns. Thus, the relative volatility of the real estate market and portfolio can be measured through the slope of the line and represented as beta. Besides that, beta coefficients are the volatility standard with respect to the stock portfolio in contrast to the market value. In the case of a greater slope of the line, a scenario of a trade off with respect to risk return can be noticed (Gillespie, 2020). Therefore, the formula of the Treynor measure is "Treynor Measure=(PR−RFR)/β". The PR and RFR refer to portfolio return and risk-free rate respectively.

The numerator recognises the risk premium and portfolio risk has been correspondent to the denominator and the resulting value expresses the per unit risk in contrast to the return of the portfolio. It has been observed that a reflection of a better portfolio of the concerned real estate projected can be derived from gaining higher value in the Treynor measure. The measurement of a portfolio of the concerned project needs to be performed based on the systematic risk. Therefore, it can be assumed that investors have sufficiently diversified portfolios and consideration of unsystematic risk can be avoided (Pike, 2020). In view of the scenario, this tool has a major significant role in terms of performance measures based on the investors.

Sharpe Ratio

A high degree of familiarity with the Treynor Measure has aligned expected risk measures performed by standard deviation. In this case, risk and performance measurement with respect to the real estate portfolio does not consider only systematic risk. Therefore, the formula of the Treynor measure is "Sharpe Ratio=(PR−RFR)/SD". The PR and RFR refer to portfolio return and a risk-free rate. The concerned method has been associated with measuring the adjusted in contrast to relative returns. The investment with respect to the concerned real estate project, return objective of the fund in contrast to the estimated project needed to be evaluated (Kim, 2020). It has been observed that generally, more than one value is good for proposing surplus returns comparable to volatility.

Therefore, a comparison of Sharpe value with respect to the portfolio of real estate has to be performed in contrast to the market sector. In view of the scenario, it can be stated the aspect to the portfolio development aspect must be considered with a Sharpe Ratio value of more than 1 (Rizvi et al. 2020). The subtraction of the risk-free rate needed to be coined from the return rate of the portfolio.

Jensen Measure

It has been observed that Jensen Measure has been accounted for the measuring the return rate of the portfolio in contrast to the market risk of above-average returns. The high-level ratio of this type of measurement has led to a high-value return on the above-average. The portfolio having an invariably positive surplus return will represent positive alpha. On the other hand, in the case of portfolios that have invariably negative surplus returns, a reflection of negative alpha can be gained (Çamlibel, Sümer and Hep?en, 2021). The formula of the Jensen measure is "Jenson’s alpha = (PR−CAPM)". The PR and CAPM refer to portfolio return and a risk-free rate plus beta respectively.

However, it has been observed that the rate of return in contrast to the portfolios will alter depending on the investment time range. In each time interval with respect to the investment in the concerned real estate project, the return value of the risk-free rate needed to be individually measured.

The Bottom Line

It has been observed that performance measures are critical factors that lie in the investment decision. Therefore, relevant information of investment plan for the concerned project can be gained through the concerned tools. Along with that, this type of practice also ensures the effectiveness relied on in the process of investment. Therefore, it can be stated that an explicit overview of the insights with respect to the portfolio of the real estate of the concerned university can be gained. Besides that, a rigid concept of the insightful overview of risk related to financing can be accurately obtained based on analysis of risk depending upon the portfolio (Crosby, Devaney and Wyatt, 2020). Hence, it can be stated that investors can optimize potential returns aspects with respect to the concerned real estate portfolio.

Conclusion

The above discussion helps to predict the credit credential that is applicable to improve the financial performance of the organisation and maintain dignity in the business. It is applicable to set and improves dignity by achieving sustainability and growth. The involvement of classified data is applicable to making the changes with the growth and standard deviation. The overall credentials in the business is being set by analysing the real estate and investment of the JLL global transparency. It is making the growth credential with profitability and achieving sustainability by increasing the value and making the dividends in the business. The growth is being set by the overall credentials in business and transparency in investment.

References

Baum, A., 2021. Tokenization—The Future of Real Estate Investment?. The Journal of Portfolio Management, 47(10), pp.41-61. https://doi.org/10.3905/jpm.2021.1.260

Çamlibel, M.E., Sümer, L. and Hep?en, A., 2021. Risk-return performances of real estate investment funds in turkey including the COVID-19 period. https://doi.org/10.3846/ijspm.2021.14957

Charles, S.L., 2020. The financialization of single-family rental housing: An examination of real estate investment trusts’ ownership of single-family houses in the Atlanta metropolitan area. Journal of Urban Affairs, 42(8), pp.1321-1341. https://doi.org/10.1080/07352166.2019.1662728

Crosby, N., Devaney, S. and Wyatt, P., 2020. Performance metrics and required returns for UK real estate development schemes. Journal of Property Research, 37(2), pp.171-193. https://doi.org/10.1080/09599916.2020.1720269

Fabozzi, F.J., Kynigakis, I., Panopoulou, E. and Tunaru, R.S., 2020. Detecting bubbles in the US and UK real estate markets. The Journal of Real Estate Finance and Economics, 60, pp.469-513. https://doi.org/10.1007/s11146-018-9693-9

Gillespie, T., 2020. The real estate frontier. International Journal of Urban and Regional Research, 44(4), pp.599-616. https://doi.org/10.1111/1468-2427.12900

Hassan, M.K., Aliyu, S., Saiti, B. and Halim, Z.A., 2020. A review of Islamic stock market, growth and real-estate finance literature. International Journal of Emerging Markets, 16(7), pp.1259-1290. https://doi.org/10.1108/IJOEM-11-2019-1001

Hoesli, M. and Malle, R., 2022. Commercial real estate prices and COVID-19. Journal of European Real Estate Research, 15(2), pp.295-306. https://doi.org/10.1108/JERER-04-2021-0024

Hofman, A. and Aalbers, M.B., 2019. A finance-and real estate-driven regime in the United Kingdom. Geoforum, 100, pp.89-100. https://doi.org/10.1016/j.geoforum.2019.02.014

Jacobs, K. and Manzi, T., 2020. Conceptualising ‘financialisation’: governance, organisational behaviour and social interaction in UK housing. International Journal of Housing Policy, 20(2), pp.184-202. https://doi.org/10.1080/19491247.2018.1540737

Kim, H.M., 2020. International real estate investment and urban development: an analysis of Korean activities in Hanoi, Vietnam. Land Use Policy, 94, p.104486. https://doi.org/10.1016/j.landusepol.2020.104486

Nanda, A., Xu, Y. and Zhang, F., 2021. How would the COVID-19 pandemic reshape retail real estate and high streets through acceleration of E-commerce and digitalization?. Journal of Urban Management, 10(2), pp.110-124. https://doi.org/10.1016/j.jum.2021.04.001

Pike, J., 2020. The future of sustainable real estate investments in a post-COVID-19 world. Journal of European Real Estate Research, 13(3), pp.455-460. https://doi.org/10.1108/JERER-07-2020-0042

Raco, M., Livingstone, N. and Durrant, D., 2019. Seeing like an investor: Urban development planning, financialisation, and investors’ perceptions of London as an investment space. European Planning Studies, 27(6), pp.1064-1082. https://doi.org/10.1080/09654313.2019.1598019

Rizvi, S.K.A., Mirza, N., Naqvi, B. and Rahat, B., 2020. Covid-19 and asset management in EU: A preliminary assessment of performance and investment styles. Journal of Asset Management, 21, pp.281-291. https://doi.org/10.1057/s41260-020-00172-3

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