Investment Analysis Details As a property analyst, you are required to carry out an investment analysis report for your client who has an opportunity to purchase income-producing property. You must id

FINC3009 Property Finance – SPRING 202 2 Assignment - Guidelines Part 1: Introduction Identify an income producing commercial property ( office, retail or industrial ). The information could be identified via RPData or websites such as realestate.com.a u , CoreLogic etc). Part 2: Property Market § Information for the review of market fundamentals can be found from the websites of the Australian Bureau of Statistics (ABS), Reserve Bank of Australia (RBA), journal articles, professional magazines, and property agencies such as Property Council of Australia . § For local m arket review of property parameters , in addition to the sources above, information can be found from the reports of several property companies such as Jones Lang LaSalle, Knight Frank , CBRE etc . Part 3: Mortgage Requirements We acknowledge that getting the actual lending rate for a commercial investment property is often negotiable with the lending institution. Because of this constraint, you c ould explore the use of business lending rate from at least three lending institutions to discuss the different loan opti ons . You are required to discuss the different loan options and give your recommendation (fixed or variable interest rate; fully amortising or interest - only). You need to calculate the mortgage repayment s for at least 3 lenders as well. See the textbook (chapters 3, 4 and 6) or P owerPoint slides (see Weeks 4 - 6). Please check with major banks regarding interest rates, loan options etc. Part 4: Investment Analysis § A discounted cash flow - you need to project a DCF on property (without financing) - See the PowerPoint slides of Weeks 7 - 8 and the textbook (chap ters 9, 11 and 12) § Based on the DCF - you should able to calculate the IRR and NPV on property; discuss the results. § The impact of debt financing - project a DCF on Equity before tax; calculate the NPV and IRR on equity; discussion. § The optimal financing strategy - comparing different debt financing strategies and identify the optimal strategy. Examples will be given in the lecture and be available online (vUWS). Part 5: Conclusion You should summarise the key findings. Recommendations should also be given; should the property be purchased? How should it be financed?