Housing Project Investment Feasibility Analysis (Case Study Hasanah City Housing)

With an ever-increasing population resulting in rising housing demands, one solution is to create more housing. Parung Panjang in Bogor is one of the developing areas in the real estate industry. PT Hasanah Karya Abadi, a developer located in Jl. Arsitek F Silaban No.9 Bogor, West Java is planning to build a commercial residential area called Hasanah City. Hasanah City will occupy around 6,892 sqm of land in Parung Panjang, Bogor. This housing project is targeted at the lower-middle to upper-middle class. Given the size of the required finances in the long run, it is critical to thoroughly and accurately analyze the investment’s viability. This is done to reduce the risk of future loss as well as serve as a guide in decision-making that will decide whether or not the project can proceed as planned. As the project will occupy a strategic area, the feasibility analysis is assessed from the technical and financial aspects. With a land area of 6,892 sqm, the result of the technical aspect feasibility analysis defines the planned number of houses that can be built as many as 30 units; 7 units of type 36/72, 16 units of type 36/48, and 7 units of type 45/90. Meanwhile, using the Net Present Value (NPV) approach to analyze the financial aspects, a value of IDR 15,798,426,042,18 (NPV>0) was found. The Hasanah City housing project is feasible to run with an interest rate of 15% each year, using the Internal Rate of Return (IRR) technique, with an interest rate of 10-20%, a 58% IRR is yielded with a Minimum Attractive Rate of Return (MARR) value of 15%.  With an IRR of 58%>15%, this project is feasible to run as the interest rate is larger than MARR.