ESM 301 – Principles of Valuation
COURSE PARTICULARS
Course Code: ESM 301
Course Title: PRINCIPLES OF VALUATION 1
No. of Units: 3
Course Duration: Two hours of theory and one hour of tutorial per week for 13 weeks.
Status: Compulsory
COURSE INSTRUCTORS
Mr. A. O. Adewusi
ESM Departmental Office
Dept. of Estate Management
Federal University of Technology, Akure, Nigeria.
Phone: +2348135631484 Email: aoadewusi@futa.edu.ng
and
Mr. Olukolajo, M. A
ESM Departmental Office
Dept. of Estate Management
Federal University of Technology, Akure, Nigeria.
Phone: +2348059876903 Email: maolukolajo@futa.edu.ng
COURSE DESCRIPTION
This course intends to provide an introduction to property valuations principle. The general
approach adopted is a combination of theoretical explanations and practical examples. The
intention is to discuss the context of the market, show how valuation practice has developed
within the context and explain the application of valuation methods in practice. This course
covers 4 main areas of study:
1. Concept of Valuation
 Factors that affect supply and demand for land and building
2. Property Market- Its characteristics and composition
3. Use of Valuation Table and,
4. Methods of Valuation:
 Comparison Method,
 Investment Method,
 Cost Method,
 Residual Method and,
 Profit Method
1
COURSE OBJECTIVES
The objectives of this course are to:
 Introduce students to the practical principles of property valuation; and
 Ensure that students are able to practically understand valuation methodologies which
will enable them solve simple mathematical valuation problems using both formulae and
valuation tables and apply same to solving practical valuation problems
COURSE LEARNING OUTCOMES / COMPETENCIES
Upon successful completion of this course, students will be able to:
 Clarify and explain the usages of various simple valuation
 Differentiate between various mathematical functions of basic valuation formulae
 Solve simple valuation problems using both tables and formulae
 Understand the dynamics of the property market and,
 Understand the basic pricing techniques in the property market
GRADING SYSTEM FOR THE COURSE
This course will be graded as follows:
Class Attendance
Assignments
Test(s)
Final Examination
TOTAL
5%
15%
20%
60%
100%
GENERAL INSTRUCTIONS
Attendance: attendance is highly recommended as repeat of already treated topics will not be
accommodated in subsequent classes. In case of illness or other unavoidable causes of absence,
the student must communicate as soon as possible with any of the instructors, indicating the
reason for the absence.
Academic Integrity: refer to the university code of conduct handbook and adhere as appropraite
Assignments and Group Work: Students are expected to submit assignments as scheduled to
avoid penalties conditions of extenuating circumstances will be considered. Effort logs will be
used in classes to determine each student’s contribution to group tasks
Code of Conduct in Lecture Rooms: Students should turn off their cell phones during lectures.
Students are prohibited from engaging in other activities (such as texting, watching videos, etc.)
during lectures. Food and drinks are not permitted in the lecture room.
READING LIST
Baum, A. and Crosby, N. Property Investment Appraisal 2 nd Edition Thomson Business Press
London
Isaac, D. (2002). Property Valuation Principles. Palgrave Macmillan Publishing, Basingstoke,
Hampshire.
Parry’s valuation table (Any edition)
Sayce, S. et al (2006). Real Estate Appraisal: from worth to value. Blackwell Publishing Limited
Oxford, UK.
2
Scarett, D. (2009). Property Valuation: the 5 methods. 2 nd Edition Routledge Abingdon, Oxon.
COURSE OUTLINE
Week
1
Topic
Introduction and Course Overview
Course outline
Remarks
During this first class, the course delivery
mode will be communicated to the students
and the expectation of the students from the
course will also be documented.
Getting students familiar with the various
concept of valuation and factors that affect
property value
At the end of the classes, students will be
familiar with dynamics of the property
market
Concept of Valuation
2
3
4&5
6&7
8
9
10 &
11
12
13
Property market
 Concept of property market
 Function of property market
 Characteristics of property market
 Composition of property market
Use of valuation table
 Present value of N1
 Amount of N1 and Amount of N1 PA
 Annuity N1 will purchase
 YP and YP in perpetuity
 Exercises
Comparison method of valuation
 The assumptions required
 Merit and demerit of the method
 Worked examples
 Exercises
MID SEMESTER TEST
Investment method of valuation
 The assumptions required
 Merit and demerit of the method
 Worked examples
 Exercises
Cost and profit method of valuation
 The assumptions required
 Merit and demerit of the method
 Worked examples
Exercises
Getting students familiar with the use of
valuation tables and letting them appreciate
how the formulae corresponds with the
tables
Residual method of valuation
 Underlining principles
 Merit and demerit of the method
 Worked example
 Exercise
REVISION
The suitability and appropriateness of the
method is unveiled to the students
The suitability and appropriateness of the
method is unveiled to the students
The suitability and appropriateness of the
method is unveiled to the students
The suitability and appropriateness of the
method is unveiled to the students
At the end of all the classes, students are
given opportunity to ask questions and
issues are clarified to rhem
3