I wouldn't call it common, but depending on circumstances, it's not necessarily bad.
For two single friends, this seems innocent enough. But, considering that at least one of them is in a serious relationship, I do think it's awkward.
What you describe sounds like the female friend has suggested a date. I don't blame you for seeing the red flag and being uncomfortable.
My suggestion would be to tell your boyfriend how you're feeling and see how he reacts. I think it's completely reasonable to say that him spending the night at a female friend's apartment (have you ever met her?), makes you uncomfortable. Especially considering the fact they are preplanning this vs. just seeing how long it takes to hang the stuff on the ceiling.
For instance, it's one thing to say "If this ends up taking a long time and it's too late to catch the bus home, you are welcome to sleep on the couch. I'll buy you breakfast the next day if that's the case." and another to say "I don't know how long this will take, so let's eat dinner, watch a movie, and go to breakfast and set these plans in stone." In the latter, when is he actually doing the work? It seems that the whole evening is planned with other things.
If I were you, I would want my bf to invite me along. You can help his friend prepare dinner while he hangs stuff on the ceiling and then if it gets late, the two of you can go to a hotel and make it a "weekend getaway".
That being said, I'm sure there are situations where it really is exactly what he said. You may have nothing to worry about. Just consider that right now you are uncomfortable and unsure, which is fair. I think you should address that with him and work out a plan of action that you are both ok with.