Property development risk management process model

Abstract

Property business is one of the most dynamic and risks businesses. The property industry has a bad reputation for managing risk. Businesses in the property sector, as with businesses in all other economic fields, need to manage each risk they face so that a balanced relationship between rentability (rate of return) and business liquidity is not disturbed by events, both economic and non-economic. Knowledge of risk management in property development in Indonesia, as seen from the available references is limited to general management theory both for industry and projects. This research is a simplification of the model 12 (twelve) stages of the development of the property industry in the opinion of Wurtzebach and Miles (1995) into 5 (five) stages namely; initiation phase, feasibility study phase, the commitment phase, the construction phase, and the operation phase by including the risk management process at each stage. The main objective of this research is to develop a risk management model of property development in the tourism area. To achieve the main objectives of this study the following secondary objectives are set: (i) exploring theories and models of risk management that are relevant to property development; (ii) identify the level of potential risk (hazard), the level of vulnerability, capacity, (iii) analyze risk factors based on the level of potential risk (hazard), vulnerability, capacity, (iv) recommend property development risk management model. This research was designed in 6 (six) stages consisting of; (i) problem identification stage, (ii) scope development stage, (iii) data collection stage, (iv) data processing stage, (v) model development stage. Conceptually, the methodology proposed in this study refers to the key steps of risk management which include identification, qualitative/quantitative risk analysis, risk response and risk mitigation. This study justifies that based on literature studies it is necessary to develop a specific risk management model for property development that is more systematic, and easy to apply. qualitative/quantitative risk analysis, risk response and risk mitigation. This study justifies that based on literature studies it is necessary to develop a specific risk management model for property development that is more systematic, and easy to apply. Qualitative/quantitative risk analysis, risk response and risk mitigation. This study justifies that based on literature studies it is necessary to develop a specific risk management model for property development that is more systematic, and easy to apply.