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

Geekiyanage, Devindi, Ramachandra, Thanuja and Thurairajah, Niraj (2018) A model for early stage estimation of Operational Expenses (OPEX) in commercial buildings. In: Proceeding of the 34th Annual ARCOM Conference. ARCOM, pp. 617-626. ISBN 9780995546325

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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.

Item Type:	Book Section
Uncontrolled Keywords:	cost modelling, hedonic regression, indices, OPEX
Subjects:	K900 Others in Architecture, Building and Planning
Department:	Faculties > Engineering and Environment > Architecture and Built Environment
Depositing User:	Paul Burns
Date Deposited:	08 Mar 2019 17:22
Last Modified:	10 Oct 2019 21:45
URI:	http://nrl.northumbria.ac.uk/id/eprint/38353

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