Feasibility Study of Apartment Development on Jl I Gusti Ngurah Rai

Name: Alfina Rahma Al-Banjary

Class : 3 MRK 5

Nim: 2141320088

D-IV CONSTRUCTION ENGINEERING MANAGEMENT

DEPARTMENT OF CIVIL ENGINEERING

STATE POLYTECHNIC OF MALANG

 2024

PREFACE
Praise and gratitude are always offered to the presence of God, who controls nature and its
contents, who has given health to all of us. Because of His grace, I was able to complete this
proposal with the title "FEASIBILITY STUDY OF APARTMENT CONSTRUCTION Jl I Gusti
Ngurah Rai" This proposal was made in order to complete a big task as a Malang Polytechnic
student. In the process of writing this proposal, I would like to thank you:

1. Mr. Mohamad Zenurianto, Dipl.Ing.HTL., MSc as the Head of the department who
provided support and motivation to us.
2. Mrs. Prof. Ratih Indri Hapsari, S.T., M.T., Ph.D. as a lecturer in research methodology
courses who has provided guidance during the completion of proposals
3. To all the family and friends in the Civil Engineering Department who provided a lot of
support and motivation.

The author hopes that through innovation proposals can solve problems in the world of
civil engineering. This proposal also has many shortcomings and errors, the author
apologizes for any mistakes that occurred, And also welcome to any criticism and
suggestions from readers.

Malang, 17th Mei 2024

Author
 TABLE OF CONTENT

Contents
PREFACE.......................................................................................................................................................2
CHAPTER I................................................................................................................................................4
INTRODUCTION.......................................................................................................................................4
1.1 Backgroud....................................................................................................................................4
1.2 Problem Formulation...................................................................................................................5
1.3 Problem Limitations.....................................................................................................................5
1.4 Purpose of the study....................................................................................................................6
1.4 Contribution.................................................................................................................................6
1.5.1 Practical Contribution..........................................................................................................6
1.5.2 Scientific Contribution.........................................................................................................6
CHAPTER II...................................................................................................................................................7
2.1 Previous Resourch........................................................................................................................7
2.2 Theory..........................................................................................................................................7
 CHAPTER I
INTRODUCTION
1.1 Backgroud
Jakarta is the capital of Indonesia and is a trading center that makes many people seek
their fortune in this city, resulting in the population in Jakarta increasing and the need for
housing / housing increases from year to year, causing limited land and increasing land values
thus creating a trend of property development. Moreover, residential areas such as apartments are
starting to shift into city buffers. Bekasi City is one of Jakarta's buffer cities that already has a
fairly good infrastructure, especially in the transportation sector.

Seeing the existing opportunities, it is planned to build an apartment on an empty land

located on Jl. I Gusti Ngurah Rai, Kranji District. West Bekasi., Bks City, West Java 17133. The
location of the land is close to Cakung Station which will provide easy accessibility of
transportation from/to the city of Jakarta. The trend of apartment development that has occurred
over the last 5 years around the development land also provides opportunities for apartment
development in the object of study targeted at the millennial generation.

As a solution to accommodate people's needs for housing. Each project plan must be
preceded by a feasibility study as a review of aspects that affect the increase in existing potential
and minimize the impact arising as a result of apartment construction. The feasibility study that
will be carried out includes studies of technical aspects, financial aspects and environmental
aspects. On this occasion, the author will examine the feasibility study in the investment aspect
of apartment construction projects, precisely on Jalan I Gusti Ngurah Rai.

The method in this feasibility study uses a quantitative approach for the calculation of
investment analysis, as well as a qualitative approach for location analysis, market analysis and
space needs analysis.formulate problems based on surveys through connecting media and obtain
secondary data. After finding potential or problems, conduct a direct survey of the vacant land
that is the object of research, namely Jalan I Gusti Ngurah Rai to ascertain the potential and
problems found. In this study, primary data obtained directly using an interview approach were
used, such as data sourced from land owners, land maintainers and surrounding communities.

Include sources from similar competitors needed to understand existing market

conditions. Meanwhile, secondary data are obtained indirectly through the media, including data
from macroeconomics, population growth and urban and regional plans. In conducting field
surveys, the author also conducts documentation that is used as supporting data. The analysis
carried out in this study is legality analysis, location analysis, market analysis both macro and
micro, analysis of space requirements and product composition and investment analysis.

Identify potential and problems of land developed both from internal and external factors,
and see the existing conditions and opportunities from similar markets and competitors in the
surrounding area. So that it can provide recommendations on the feasibility of development
investment by planning the composition of alternative products that can be developed that
provide the best return on investment.

1.2 Problem Formulation

1. How to analyze environmental aspects in apartment development?
2. How to analyze technical aspects of apartment construction
3. How is the feasibility analysis of apartment construction based on financial aspects,
namely in the form of Cash flow, NPV, IRR, Payback period, and Profability index?
4. What is the overall recommendation?
5. How to analyze sensitivity in apartment construction

1.3 Problem Limitations

In conducting this research, there are several problem limitations to clarify the scope of
discussion, namely:
1. The object of the feasibility study is the Apartment, only devoted to financial or
financial aspects. Market conditions are assumed to have good opportunities.
2. The sensitivity analysis in this feasibility study is carried out on the most feasible
alternatives, the analysis will be carried out on assumptions when construction
cost conditions and operating costs increase by 10%, normal (moderate), and
decrease by 10%.
1.4 Purpose of the study
1. Make an analysis of environmental aspects in apartment construction
2. Make an analysis of technical aspects in the construction of an apartment
3. Make a feasibility analysis of apartment construction based on financial aspects,
namely in the form of cash flow, NPV, IRR, Payback, period, and profability index
4.Make overall recommendations
5. Perform sensitivity analysis

1.4 Contribution
1.5.1 Practical Contribution
The results of this research are expected to be useful for the development of
engineering economics, researchers, as well as for developers and investors. And analyze
the impact of certain changes on business or investment viability. For apartment
developers and investors, it is hoped that the results of this study can explain the benefits
of investing in apartment construction based on financial aspects.

1.5.2 Scientific Contribution

The results of this research are expected to be useful for the development of
engineering economics, researchers, and for apartment developers and investors. The results of
this study can provide important information in determining discount rates, analyzing the
business feasibility of apartment projects and investment values for developers or investors, and
analyzing the impact of certain changes on the feasibility of a business or investment.
 CHAPTER II

2.1 Previous Resourch

(Josiah et al., 2020) The purpose of apartment construction on Jl. Jatibening Raya, Kel.
Jatibening Baru, Kec. Pondogede, Bekasi City is to find out the feasibility of building
apartments based on a relatively small land area, in order to find out the potential and
weaknesses that exist. Feasibility is seen through analysis on legality, technical and
investment aspects carried out using qualitative methods. The result of this feasibility
study is to provide recommendations for the feasibility of development of alternative
product compositions that can provide the best return on investment.

(Mustofa & Purwito Moestamin, 2018) Bertujuan untuk mendapatkan hasil rencana proyek apartment Biz Square

(Achmad Dermawan et al., 2021) Aims to determine and identify physical and legal
feasibility, feasibility of environmental impacts on health, market feasibility and
investment feasibility to find out the best and highest concepts and alternatives on land in
Gunung Putri covering an area of 16,000 m2.

2.2 Theory from book

Pp no. 13 Tahun 2021 merupakan pedoman pelaksanaan studi kelayakan teknis dalam
Pembangunan apartment di Indonesia. Peraturan ini bertujuan untuk memastikan bahwa setiap
proyek perumahan memenuhi standar teknis yang ketat, aman, dan tidak akan membahayakan
lingkungan
2.1 Financial FS of Project
Financial is one of the aspects used in assessing the investment plan of a commercial
project. The purpose of analyzing the financial aspect of a project feasibility study is to
determine an investment plan through the calculation of expected costs and benefits, by
comparing expenditures and revenues. This includes considering limitations on available
funds, the cost of capital, the project's ability to repay these funds within a specified period,
and assessing whether the project will be able to grow in the future. The principle used in
evaluating the financial aspect is the cash flow principle, where benefits are cash inflows,
while costs are cash outflows. Giatman (2011:130). The selection criteria that are commonly
practiced on projects are as follows:

2.4.1 Net Present Value (NPV)

NPV stands for Net Present Value and refers to the method of calculation of net
value at the present time. The present is considered the time when the initial calculation
concurs with the time the evaluation is carried out. Hence, in calculating the net present
value, its purpose is to subtract all cash outflows from cash inflows to their present
values. The general formula for calculating NPV is as follows:

NPV =∑ PV Masuk−∑ PV Keluar ……….(1)

Known:

NPV = Nett Present Value

In = PV Cash Inflow

Out = Cash Outflow

NPV criteria is:

a. If NPV > 0, then the investment is profitable or feasible so it is recommended
that the investment be implemented
 b. If NPV < 0, then the investment is not profitable or not feasible (Unfeasible) so
it is recommended that the investment plan not be continued.

2.4.2 Benefit Cost Ratio (BCR)

The use of BCR criteria is better known in evaluating projects for the public
interest or public sector. In this case the emphasis is placed on benefits for the public
interest
Nilai Sekarang Benefit ( PV )B
BCR= =
Nilai Sekarang Biaya (PV )C
Known:
BCR = Benefit Cost Ratio
(PV) B = Present Value Benefit
(PV) C = Present Value Cost
Indication of the BCR criteria, namely:
c. BCR ≥ 1, then the investment is declared feasible
d. BCR < 1, then the investment is declared unfeasible

2.4.3 Internal Rate of Return (IRR)

IRR is the interest rate when the NPV is zero. In simple terms, the ability of cash
flow to return capital and how much obligation must be fulfilled. So that ability is called
IRR (Internal Rate of Return), while the obligation is MARR (Mi nimum Attractive of
Return). The MARR value is generally determined by considering the following things,
namely:

a. Interest rate (i)

b. Other costs that must be incurred for investment (Cc)

c. Investment Risk Factor (α)

Thus the IRR can be calculated using formula 2.13 as follows:

NPV 1
IRR=ι1 X ( ι1−ι 2)
NPV 1−NPV 2

Where:
 NPV1 i1 = Present Value of i1 (Rp.)

NPV2 i2 = Present Value of i2 (Rp.)

i1 = Interest rate 1 (%)

i2 = Interest rate 2 (%)

To get the IRR, you must find the NPV amount by The variable i value changes in such a
way that the value i will be obtained when the NPV approaches zero, namely NPV (+)
and NPV (-) by trial and error. An investment is declared feasible if an investment plan is
said to be profitable with IRR ≥ MARR.

2.4.4 Payback Period (PP)

Payback period refers to the technique that can be used to find out how long it
will take to recover the initial investment from the cash flow accruing in the project or
investment. Which can be calculated using formula 2.15 as follows:

Cf −Σ An
PP=(n−1)+( )
An

Known:

Cf = First Cost

An = Cash Flow in year n

N = Return Year plus 1

To determine whether or not an investment is feasible from a financial aspect,

conditions are needed in determining PP, namely:

a. PP < maximum time, then the proposed project proposal is accepted

b. PP > maximum time, then the project proposal is rejected

 The weakness of this method is that it usually lies in the value of money in time
which is ignored (time of value) and does not ignore cash flows that occur after the
payback period

2.4.5 Sensitivity Analysis

According to Giatman (2011:130), investment parameters that require sensitivity analysis
include:

1. Investment

2. Benefits/Income

3. Costs/Expenses

4. Interest rates (i)

Sensitivity analysis generally contains the assumption that only one parameter only those
that change (variables), while the other parameters are assumed to be relatively fixed in
one analysis equation.To find out the sensitivity of other parameters, the second, third,
and so on equations are needed.