A model for early stage estimation of Operational Expenses (OPEX) in commercial buildings

Devindi Geekiyanage, Thanuja Ramachandra, Niraj Thurairajah

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Usually, Operational Expenses (OPEX) consume a substantial share (70-80%) of Life Cycle Cost (LCC) of commercial buildings. Despite its contribution to the LCC structure, often OPEX is given less focus in investment decision making and investors tend to mostly rely on initial cost alone. This is due to a lack of reliable historical cost data related to building operations and maintenance. In addition, a varying range of models are available and application of those are limited to the later stage of building life cycle as these models require an extensive set of operational cost data. Therefore, this study introduces a model, which can facilitate the early stage estimation of OPEX in commercial buildings together with OPEX indices for commercial buildings in Sri Lanka. The data related to OPEX and building characteristics were collected from 35 commercial buildings in Sri Lanka. The hedonic regression model developed indicates that 94.6% of the variance in the annual OPEX/sq. ft. in commercial buildings could be expressed by working days/week, working hours/day, gross internal floor area, building height, and the number of occupants. These findings would enable an investor to optimise the OPEX by controlling the impact of physical characteristics in commercial buildings. Further, the developed indices will be beneficial for industry practitioners in measuring relative changes in OPEX in commercial buildings over a period of time.

Original languageEnglish
Title of host publicationProceeding of the 34th Annual ARCOM Conference
EditorsChris Gorse, Christopher J Neilson
PublisherARCOM
Pages617-626
Number of pages10
ISBN (Print)9780995546325
Publication statusPublished - 5 Sep 2018
Event34th Annual Association of Researchers in Construction Management Conference, ARCOM 2018 - Belfast, United Kingdom
Duration: 3 Sep 20185 Sep 2018

Conference

Conference34th Annual Association of Researchers in Construction Management Conference, ARCOM 2018
CountryUnited Kingdom
CityBelfast
Period3/09/185/09/18

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