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PDM611S - PROPERTY DEVELOPMENT AND MARKETING - 2ND OPP - JULY 2024 |
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nAmlBIA UnlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTYOF ENGINEERINGAND THE BUILT ENVIRONMENT
DEPARTMENT OF LANDAND SPATIALSCIENCES
QUALIFICATION(S): BACHELOR OF PROPERTYSTUDIES
DIPLOMA IN PROPERTYSTUDIES
QUALIFICATION(S)CODE: 08BOPS
06DIPS
NQF LEVEL:6
COURSECODE: PDM611S
COURSENAME: PROPERTYDEVELOPMENT AND
MARKETING
EXAMS SESSION:JULY 2024
PAPER:
THEORY
DURATION: 3 HOURS
MARKS:
100
SECONDOPPORTUNITY/SUPPLEMENTARYEXAMINATION QUESTION PAPER
EXAMINER(S) SAMUEL ATO K. HAYFORD
MODERATOR: UAURIKA KAHIREKE
INSTRUCTIONS
1. Read the entire question paper before answering the Questions.
2. Please write clearly and legibly!
3. Please STARTEACHQUESTION ON A FRESHPAGE.
4. The question paper contains a total of 4 questions.
5. You must answer ALLQUESTIONS.
6. Make sure your Student Number is on the EXAMINATION BOOK(S).
PERMISSIBLEMATERIALS
1. Non-programmable Scientific Calculator
THIS QUESTION PAPERCONSISTSOF 5 PAGES(Including this front page)
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Property Development and Marketing
PDM611S
Question 1
For each of the following statements indicate whether it is 'TRUE' or 'FALSE'. Each correct answer carries 1
mark.
(18)
a) For a specific property development project, market research is important in getting to know the
relevant clientele in a specific real estate sub-market and respond to their needs with a suitable
product offering.
b) It is the responsibility of the agent or salesperson to advise and assist, the seller has extremely limited
right in determining the listing price of the property for sale.
c) The real estate market is not a single market but consists rather of a series of submarkets with
different needs and desires that can change independently of one another.
d) One of the attributes of a perfect investment is that it produces an income which compensates for
the eroding effects of inflation.
e) The local authority is one of the members of the property development team in the development of
private estates such as town houses.
f) The real property market is an omnibus term that covers all transactions in real property. However, it
is possible to distinguish sub-markets according to the characteristics of each.
g) Overtime, amongst other things, demand for land resources is brought about by changes in size and
composition of the population.
h) Any new development, or change in use, in urban areas under local authority jurisdiction usually do
not require planning consent.
i) The three primary reasons for owning landed property are as an investment, showing off (prestige)
and charity purposes.
j) The two main legal interests in land are sub-leasehold and servitude.
Second Opportunity Examination Paper
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July 2024
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Property Development and Marketing
PDM611S
k) Rental growth does not depend upon a tenant's performance but upon supply and demand for
property for occupation by tenants.
I) When the supply of a certain type of real estate is short, rents and prices may be high, but only
temporarily. New competition will add to the supply and drive prices further up.
m) Real estate market analysis has the potential to identify some features lacking in the existing supply of
properties, which if included in the proposed project, will offer a competitive advantage.
n) Market areas that boast of better highway network capacity usually tend to have competitive
advantage that enhances their ability to command rent.
o) The more stable the market, the less the need for market research for data collection and analysis.
p) Financial analysis is crucial and should be conducted in real estate investment decisions to ensure
what is being planned is actually feasible.
q) Rental revenues can be estimated by looking at comparable properties in the market and
benchmarking existing rental rates. Leasing brokers are the best sources for this type of information.
r) Tenants sometimes receive rent concessions or special inducements from property owners. This is
normally related to periods where vacancies are particularly high.
(18]
Question 2
a) Okalongo Rock Square could reasonably be expected to be used to develop for residential, an office
or a commercial facility. Recent market survey conducted revealed the detail construction and
marketing information on the respective uses below;
Types of Use
Residential
Office
Commercial
Area for
Construction
(sq. m)
455
358
285
Cost of
construction
(sq.min N$)
750
850
610
Rental
(N$ sq. m)
55
68
75
Vacancy
rate(%)
3
2
3
Operating
expenses
(N$)
12,500
8,400
6,200
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Property Development and Marketing
PDM611S
Assume a market return of 10% on all three buildings. Market capitalization rate of 6%.
You are required to carry out an appraisal to determine the highest and best use that maximizes the
value of Okalongo Rock Square and advise accordingly.
(16)
b) Loan-to-value (LTV) ratio i.e. lending risk assessment ratio is important aspect of property market
research in obtaining information for affordability analysis. Briefly explain this statement.
(2)
c) Mr Nakashole needs to borrow N$950,500 to purchase a N$1,200,000 semi-detached house.
Calculate the Loan-to-value (LTV) ratio and advise the mortgage institution appropriately.
(3)
d) Briefly state the meaning of the following as used in real estate market research
(8)
i) Highest and best use study
ii) Predetermined Use studies
iii) General Market Studies
iv) Site-Specific Market Studies
[29]
Question 3
a) As a property investment analyst, you are required to provide Meme Shehaama with a professional
advice as to which of these mutually exclusive investments should be undertaken by him if his
(investor) target rate is 10%.
Particulars
Outlay
Cash Inflows
Year 1
Year 2
Year 3
Investment A N$
7,000
4,000
3,000
2,500
Investment B N$
9,000
5,000
4,000
3,000
In the process of carrying out the investment appraisal, you are informed that the projected Cash
inflows for year two and year three of Investment A and Investment B respectively were inclusive of
municipal taxes. These expenses are estimated at N$250 and N$165 for Investment A and
Investment B respectively. (Adopt 4 decimal places for all PV N$1 calculated figures).
(11)
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Property Development and Marketing
PDM611S
b) Assuming by degree of dependence the two investments in 3(a) above are Complementary, what will
be your advice for Meme Shehaama and why?
(2)
[13]
Question 4
a) Elaborate on the factors that constitute "effective cause" of transaction.
(8)
b) Elaborate on the four (4) aspects of qualifying the buyer by an estate agent.
(8)
c) List the professional services that an estate agent can give to his/her client.
(11)
d) Outline the penalties imposed on an estate agent for being guilty of improper conduct.
(3)
e) Describe the circumstances under which a claim can be made against the fidelity fund.
(8)
f) What is the objective of the Namibia Estate Agents Board?
(2)
[40]
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