Highest and Best Use (HBU) Analysis on Vacant Land in Jakarta Garden City, East Jakarta

Abstract

Land availability in the capital of Indonesia, Jakarta, is dwindling. However, its population is growing. This growth affects population density and activity to rising, as well as the need for land, especially for housing purposes. Moreover, land prices are also escalated over time. Hence, to optimize the available land utilization and value, it is necessary to find the best designation and produce the highest land value. The Highest and Best Use Analysis is used to achieve this goal. By evaluating several aspects, namely, physical, legal, financial, and maximum productivity. This research was applied to an asset of vacant land in Asoca Street, Jakarta Garden City, Cakung, East Jakarta with an area of 3.725,68 m2. After the analysis, it is obtained that apartment is the best designation, producing the highest increase in land value of Rp 131.366.494/m2 and productivity after developed by 591,04%. It is also feasible to develop, because with an investment period of 10 years, the designation produces a net present value greater than zero, which is Rp 418.641.935.213, an internal rate of return greater than the minimum attractive rate of return of 7% which is 22,76%, and a payback period of 4 years, 3 months, and a day.