PRODUCT SHARING BASIS AS A FINANCING STRATEGY FOR PT JAYA MAS INTERNATIONAL IN DEVELOPING AN APARTMENT PROJECT IN BATAM (CASE STUDY: SPRINGFIELD BATAM CENTER SUPERBLOCK)
Batam, as the closest parts of Indonesia to Singapore, is known either as transit place or business. Hence, Batam becomes a potential place to invest in property business because the demand is not only coming from local community, but also from other countries such as Singapore and Malaysia. Based o...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/29686 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Batam, as the closest parts of Indonesia to Singapore, is known either as transit place or business. Hence, Batam becomes a potential place to invest in property business because the demand is not only coming from local community, but also from other countries such as Singapore and Malaysia. Based on this condition, PT Jaya Mas International, Batam-based developer, see an opportunity to build a superblock which has apartment in Batam. However, capital become a critical matter for PT JMI. Therefore, the company is looking for alternatives to fund the project. There are two options offered in this study. The first one is using bank loan and the second is using creative financing so called product sharing basis with contractor. To offer the project whether to bank or contractor as an investor, PT JMI needs to show the feasibility of the project in order to attract the potential investors. <br />
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To estimate the feasibility of the project, the method taken in this study is by making projected cash flow. To determine whether the project is feasible or not, there are several indicators used which are Net Present Value (NPV), Internal Rate of Return (IRR), payback period, Return on Investment (ROI) and Return of Equity (ROE). <br />
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From the feasibility result, product sharing basis gives the best value for the company from all indicators compared to bank loan. In optimistic scenario, the NPV shows a positive result with Rp13,560,079,715.51 while the result for IRR is also much higher than WACC used which is 43.79%. The payback period is 1.32 or 1 years 3 months and 25 days. In terms of ROI and ROE, this financing gives 47.05%.Other benefits for PT JMI to use product sharing basis are PT JMI can gain more potential customers and project’s sustainability. <br />
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Using this strategy, the proportion of apartment units used is 80:20, which means 80% of the total units belong to contractor whereas the rest 20% for PT JMI. With the total units of this apartment project is 336, means 268 units belong to the contractor and 68 units belong to PT JMI <br />
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