GY472      Half Unit
Real Estate Investment

This information is for the 2025/26 session.

Course Convenor

Giorgio Pietrabissa

Availability

This course is available on the MSc in Real Estate Economics and Finance. This course is available with permission as an outside option to students on other programmes where regulations permit. This course uses controlled access as part of the course selection process.

How to apply: Priority: MSc Real Estate Economics and Finance and then other students. Priority is typically for students enrolled in Geography and Environment programmes, or joint degree programmes, however course specific availability is indicated via the 'Availability section' on the LSE course guide webpages. Guidance on how to apply to individual controlled access courses can also be found on LSE for You in the Graduate Course Selection system.

Please note: The number of students that can be accommodated is limited. If a course is over-subscribed, places will be allocated at the Department's discretion and a waiting list may be created. It is advised to have an alternative course in mind as a back-up in case you are unable to secure your first-choice course selection.

Deadline for application: Further guidance and information on course selection for Geography and Environment courses (GY4xx) will be available on the Geography and Environment Course Selection Moodle page which will go live from Monday 8 September and will be updated with course availability information daily throughout the course selection period. This page includes information on the timeline for course selection decisions in the Geography and Environment Department as well as the individual course application processes and requirements

A list of all taught master's courses in this Department are listed on LSE's course guide webpages.

For queries contact: geog.reef@lse.ac.uk

Requisites

Additional requisites:

Entry into the MSc Real Estate Economics and Finance or by request from other qualified MSc students. Those qualified will already have knowledge of economics equivalent to a good first degree in the subject. 

Course content

This course broadly aims to study how methods from economics and finance can be used to evaluate real estate investment decisions and how to incorporate insights from urban economics to improve the profitability of investments.

In the first part of the term, the course will begin with an introduction to the urban economics of real estate investment, focusing on how shifts in supply and demand across real estate related markets impact the risk and return of an investment. The students will then work towards an understanding of how different methods of varying sophistication can be used in the empirical evaluation of risk.

The second part of the module will deal with more topical issues. These will include (amongst others): real estate development and asset management, with a focus on their impacts on risk and return; real estate investment trusts (REITs), their structures and their performance; real estate portfolio construction and analysis; trends in urban economics and their impact on investment evaluations; machine learning, data analytics and real estate investment.

Assessment for the course will centre on the valuation of a mixed-use retail property in London. A field trip to tour the property and surrounding urban environment will occur during the term.

Teaching

10 hours of seminars and 20 hours of lectures in the Winter Term.

This course has a reading week in Week 6 of Winter Term.

In the Department of Geography and Environment, teaching will be delivered through a combination of classes/seminars, pre-recorded lectures, live online lectures and other supplementary interactive live activities.

Formative assessment

Students will be expected to produce 2 essays in the WT.

In their first essay, students will work in their groups to conduct the quantitative analysis for a case study using the standard tools in real estate investment. Each student will prepare a 1000 word essay based on this quatitative work, analyzing the assumptions and methods used and the results. The second essay will also be 1000 words and center on assessing the students ability to incorporate urban economic theory and emprical research into their valuation.These formative exercises closely match the style and structure of the summative coursework. 

 

Indicative reading

  • Archer, Wayne R., and David C. Ling. "The three dimensions of real estate markets: Linking space, capital, and property markets." Real Estate Finance 14.3 (1997): 5-11.
  • Brueggeman, W. B. and J. D. Fisher (2005) Real Estate Finance & Investments (13th edition or newer), New York City, NY: McGraw-Hill/Irwin
  • Clayton, Jim, David C. Ling, and Andy Naranjo. "Commercial real estate valuation: fundamentals versus investor sentiment." The Journal of Real Estate Finance and Economics 38.1 (2009): 5-37.
  • Hoesli, Martin, Elion Jani, and André Bender. "Monte Carlo simulations for real estate valuation." Journal of Property Investment & Finance 24.2 (2006): 102-122.
  • Gunnelin, Åke, et al. "Determinants of cross‐sectional variation in discount rates, growth rates and exit cap rates." Real Estate Economics 32.2 (2004): 217-237.
  • Gyourko, Joseph, and Edward Nelling. "Systematic risk and diversification in the equity REIT market." Real Estate Economics 24.4 (1996): 493-515.
  • Lieser, Karsten, and Alexander Peter Groh. "The determinants of international commercial real estate investment." The Journal of Real Estate Finance and Economics 48.4 (2014): 611-659.
  • Plazzi, Alberto, Walter Torous, and Rossen Valkanov. "Expected returns and expected growth in rents of commercial real estate." The Review of Financial Studies 23.9 (2010): 3469-3519.
  • Sivitanidou, Rena. "Urban spatial variations in office-commercial rents: the role of spatial amenities and commercial zoning." Journal of urban Economics 38.1 (1995): 23-49.
  • Daníelsson, Jón. Financial risk forecasting: the theory and practice of forecasting market risk with implementation in R and Matlab. Vol. 588. John Wiley & Sons, 2011.

Assessment

Essay (100%, 3500 words) in Spring Term Week 1

The summative essay will be 3500 words and count for 100% of the student's final grade.The essay will centre on assessing the students' ability to use the materials and tools discussed during the course to present a rigorous investment strategy.This will include the ability to produce estimates of the impact of shifts in demand and/or supply for commercial real estate using data and rigorous methods, and the capacity to incorporate these into the evaluation of an investment proposal's risk and return.The assessment will include a group and an individual component – and students will be asked to reflect on all elements learnt during the term (not just a selected number of weeks).


Key facts

Department: Geography and Environment

Course Study Period: Winter Term

Unit value: Half unit

FHEQ Level: Level 7

CEFR Level: Null

Total students 2024/25: 36

Average class size 2024/25: 18

Controlled access 2024/25: No
Guidelines for interpreting course guide information

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Personal development skills

  • Self-management
  • Team working
  • Problem solving
  • Application of information skills
  • Communication
  • Application of numeracy skills
  • Commercial awareness
  • Specialist skills