15824 - Project Cost Estimate

Course contents

ECONOMIC EVALUATION OF PROJECTS

The aim of the course is to provide students with the operational / methodological tools to develop strategic, economic and financial feasibility studies of projects in an inter-scalar vision (from the building scale to the territorial one). The course is ideally placed at the end of the engineer / architect's training course and aims to provide the latter with some fundamental notions of economics, finance and project management able to guide him in the use of the main evaluation techniques useful in the comparison and in the choice between investment project alternatives.

COURSE PROGRAM

The real estate market

The characteristics of real estate; Real estate market vs Perfect competition market; The Real Estate Cycle. Sales and housing prices: The Hexagon Model. The role of the real estate sector in the national economy. The different market segments. The evolution of the real estate market - The financialization of the real estate market. Real estate investment funds nature and type. Specialization and division of real estate activities.

The assessment of the feasibility of building projects and urban transformation programs

Real Estate Development Process and Construction Process; Strategic feasibility, technical and production feasibility, economic and financial feasibility. Public project and private project. Analysis of the strategic dimensions of a development program: the objectives; stakeholders; the organization of the project. SWOT Analysis and notes on Multicriteria Analysis. The technical feasibility of the project: the procedural (public and private procurement) and design phases (preliminary, final and executive project) The economic feasibility of the project: Costs analysis. Value of building land. Depreciation of buildings and plants: functional, technical and economic obsolescence. Accounting rule of valuation. Cost system. Empirical estimate of the cost. Detailed estimate of the cost: the metric calculation. Considerations on the metric calculation. Standard cost. Break-even analysis; Budget of the intervention and business plan.

Investment choice and real estate development

Financial analysis of investments: The main methods of economic-financial evaluation of investments Analysis of investment balance indicators (Ratio Analysis): indicators of profitability, liquidity of investments and assets. Risk analysis: payback period method: return on investment method; discounted rate of return method; present value method; final value method

Readings/Bibliography

The individual study will be carried out mainly on the teaching materials produced by the teacher and published on the online platform. However, for those who need or intend to deepen the topics covered, some texts listed below are recommend.

M. Tomo, G. Utica, Metodi di valutazione della sostenibilità dei progetti, Maggioli, 2011

Vincenzo Del Giudice, Estimo e valutazione economica dei progetti. Profili metodologici e applicazioni al settore immobiliare, Editore: Iniziative Editoriali, Anno edizione: 2015

F. Prizzon, Gli investimenti immobiliari. Analisi di mercato e valutazione economico- finanziaria degli interventi, Celid, Torino, 2001;

M. Bravi, E. Fregonara, Promozione e sviluppo immobiliare. Analisi dei processi e tecniche di valutazione, Celid, Torino, 2004

Teaching methods

The teaching will be carried out online and will be organized in theoretical lessons and exercises with the presentation of case studies

Assessment methods

The final examination consists of a semi-structured written test from which the knowledge, skills and competences acquired must emerge.

There are 6 examination tests during the different academic sessions.

Teaching tools

Multimedia presentations

Office hours

See the website of Giovanni Virgilio