There is a widely held view that building construction costs account for approximately 15% of life cycle costs with the remaining 85% being accounted for by building operation costs. However, I am struggling to find peer-reviewed research that addresses whether or not this breakdown is correct. Can anyone point me in the direction of such research?
Hi Louis,
The capital cost (from design to construction) can amount to anything between 15% and 20% of the whole life cycle cost and the remaining 80%-85% are the operational costs. In literature, these costs are often reported in relative terms (e.g., operational costs are 7 to 8 times the construction cost).
A peer reviewed reference can be found in this article on page 262:
https://www.researchgate.net/publication/278636429_BIM_in_facilities_management_applications_a_case_study_of_a_large_university_complex
There is another reference in the below paper on page 313 stating that such cost amounts for over than 50%:
http://www.itcon.org/data/works/att/2015_20.content.00383.pdf
it really depends on the type of building. you could safely say that the operational costs account more than 50% of the total lifecycle cost.
Kind regards
Mohamad
Article BIM in facilities management applications: a case study of a...
Hi Mohamad,
Thank you for your response and for the link to your very interesting paper.
I have followed up on the references that you provided, but as I have found on numerous other occasions, the researchers tend to quote these figures as fact but the original peer-reviewed research that verifies the accuracy of the figures is very difficult to track down.
I have been seconded to work on the delivery of a major university campus development project (380,000 m2 of floor space) and as such have access to all of the professional practitioners in the development and delivery of the project over its entire life cycle. Regrettably, none of them can provide verification of the accuracy of the commonly quoted cost breakdowns. I have a feeling that this may be a gap in the research and that it might be an opening for a researcher to develop a model that would accurately predict the breakdown across a number of building types.
If you become aware of anyone working on this issue, I would be interested in collaborating with them.
Regards,
Louis
Hi Louis,
Glad to know that you are also studying this area. I used to conduct a review on the proportions of construction cost and operating cost of 43 projects from the literature. You may refer to Table 3 in the article "The Development of Life-cycle Costing for Buildings" published by Building Research & Information
http://www.tandfonline.com/doi/abs/10.1080/09613218.2014.993566#.VnpCqlV96Uk
The table contains a list of the proportions of construction cost and operating cost for each project, in present value. Generally operating cost accounts for 60% and construction cost accounts for 40%, in present value. But you may find that in the table, the proportions can be significantly different for some projects.
Best Regards
Yuting
Hi Louis,
I agree with your observations. Your project sounds very interesting.
I think generalisation of percentages would be very difficult to support unless the analysis is done by building types (school, university, hospital). Also for each individual type, there would be a range/interval for each item (e.g. capital cost between 15 - 20% of lifecycle cost). As you highlighted it's worth investigating this area using some quantitative / stat approach.
In addition to the paper indicated by Yuting, I found the following paper, focused on university buildings: http://www.tandfonline.com/doi/abs/10.1080/01446193.1987.10462089
All the best with your project.
Mohamad
Hi Louis,
I agree with your observations. Your project sounds very interesting.
I think generalisation of percentages would be very difficult to support unless the analysis is done by building types (school, university, hospital). Also for each individual type, there would be a range/interval for each item (e.g. capital cost between 15 - 20% of lifecycle cost). As you highlighted it's worth investigating this area using some quantitative / stat approach.
In addition to the paper indicated by Yuting, I found the following paper, focused on university buildings: http://www.tandfonline.com/doi/abs/10.1080/01446193.1987.10462089
All the best with your project.
Mohamad
Hi Louis,
I agree with your observations. Your project sounds very interesting.
I think generalisation of percentages would be very difficult to support unless the analysis is done by building types (school, university, hospital). Also for each individual type, there would be a range/interval for each item (e.g. capital cost between 15 - 20% of lifecycle cost). As you highlighted it's worth investigating this area using some quantitative / stat approach.
In addition to the paper indicated by Yuting, I found the following paper, focused on university buildings: http://www.tandfonline.com/doi/abs/10.1080/01446193.1987.10462089
All the best with your project.
Mohamad
Hi Louis,
I agree with your observations. Your project sounds very interesting.
I think generalisation of percentages would be very difficult to support unless the analysis is done by building types (school, university, hospital). Also for each individual type, there would be a range/interval for each item (e.g. capital cost between 15 - 20% of lifecycle cost). As you highlighted it's worth investigating this area using some quantitative / stat approach.
In addition to the paper indicated by Yuting, I found the following paper, focused on university buildings: http://www.tandfonline.com/doi/abs/10.1080/01446193.1987.10462089
All the best with your project.
Mohamad
Hi Yuting,
The table that you have compiled is very useful and reflects the views that I have received from practicing construction cost specialists, rather than those of academics.
Thank you for responding.
Louis
Mohamad,
Thank you again for your response.
I will follow up the reference that you gave me.
Regards,
Louis
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