A FEASIBILITY STUDY OF INVESTMENT ON RENTAL APARTMENT IN PHRAEK SA ROAD SAMUTPRAKAN PROVINCE

Abstract

The study aimed to: 1) assess market feasibility; 2) examine technical formats and alternatives; and 3) evaluate the financial feasibility of investing in an apartment for rent near the Phreak Sa Road Samutprakarn Province. Primary data were collected from a survey of rental apartments located within a two-kilometre radius of the project site, followed by covert non-participant observation by acting as a customer to obtain information for analysing market opportunities and determining an appropriate and competitive market positioning for the project. Interviews were also conducted with architects specialising in rental apartment building design to ensure compliance with relevant legal requirements, while secondary data were obtained from related articles and research studies. The data were analysed using descriptive and quantitative approaches, with financial tools incorporating the time value of money applied as investment decision-making criteria. The findings revealed that there were 20 rental apartments within the study area, most of which were unfurnished apartments without air conditioning and mixed-type unfurnished apartments offering both non-air-conditioned and air-conditioned rooms. As of the survey date, non-air-conditioned rooms had occupancy rates of 90-100 percent, with monthly rents ranging from 1,400 to 2,800 Baht., while air-conditioned rooms had a 100 percent occupancy rate, with monthly rents ranging from 2,500 to 3,400 Baht. Therefore, the project was positioned as an unfurnished apartment with air-conditioned rooms, with a monthly rent of 3,300 Baht. The proposed project consists of a five-storey building with 77 rooms, requiring a total investment of 39,492,900 Baht on a 352.50-square-wah land plot located in an orange urban planning zone. Based on a 20-year project life, a 90 percent occupancy rate, and a Weighted Average Cost of Capital of 5.75%, the project generated a Net Present Value of -3,383,364 Baht, a Profitability Index of 0.91, an Internal Rate of Return of 4.77%, and a Modified Internal Rate of Return of 5.27%, the switching values for revenue, operating costs, and investment costs were -6.30%, -18.20%, and -8.79%, respectively. Therefore, the project did not meet the investment decision criteria.

Keywords: Feasibility Study, Apartment, Phreak Sa Road Samutprakarn Province