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

Hemba Geekiyanage, MD; Ramachandra, T; Thurairajah, N

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 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 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.

Citation

Hemba Geekiyanage, M., Ramachandra, T., & Thurairajah, N. (2018, September). A model for early stage estimation of Operational Expenses (OPEX) in commercial buildings. Presented at 34th Annual ARCOM Conference, Belfast, UK

• Presentation Conference Type: Other
• Conference Name: 34th Annual ARCOM Conference
• Conference Location: Belfast, UK
• Start Date: Sep 3, 2018
• End Date: Sep 5, 2018
• Publication Date: Sep 5, 2018
• Deposit Date: Oct 12, 2022
• Publisher URL: http://www.scopus.com/inward/record.url?eid=2-s2.0-85055642472&partnerID=MN8TOARS
• Additional Information: Event Type : Conference