Life Cycle Cost Forecasting Model - Real Estate-Database analysis for life-cycle based investment decisions

Status

completed

Summary

In the early planning phase of buildings the owner and the architect often have to decide on the architectural concept, the kind and quality of the envelope and on the technical equipment. In many cases the building costs are still considered to be the all-dominant factor, whereas the operating costs are not taken into account or still play a subordinate role. Additionally, information about thebehaviour of individual technical solutions during the operating phase is often lacking.

The calculation of the entire life cycle costs of real estates before the actual realisation of the object (ex-ante-analysis) is already a trendsetting approach. A fact is however that hardly anyone calculates the life cycle costs of real estate projects in practice, as data about the running costs of corresponding individual buildings are not available.

The goal of the project Real Estate-Database Analysis for Life-Cycle Based Investment Decisions was to develop a support instrument in order to make decisions in the early planning phase easier. Such a tool enables an assessment of future operating costs of a building and also facilitates access to data of running costs of buildings.

Core of the project was the development of a “cause and effect model” that compares the expected investment costs, the technical building equipment and the operating costs, which consequently enable the calculation of the building’s life cycle costs (LCC).

In further consequence, the project team reviewed the existing real estate data base and compiles a service description for the implementation of the effect model in this database. Subsequently, examples of life cycle costs of buildings or running costs of individual technical systems were calculated in order to evaluate the explanatory power as well as the functionality of the effect model.

With the help of the effect model and the associated prognosis of the operating costs of buildings, the life cycle cost analysis should make the breakthrough from theory into practice. Only plausible data for running costs (proven through real examples) can be used in the life cycle cost calculation. The LCC calculation implies important benefits in the early planning phase. The owner receives substantial information about the expected running costs of the building. For different technical solutions, the prognosis model supports decision makers by informing about the expected operating cost. The application of the life cycle cost analysis in the early planning phase makes the decision towards a long lasting cost effective building more attractive.

Surveys on tools for life cycle cost analysis and forecasting models showed that existing solutions are not ready to be used yet. Due to several shortcomings, they all need adaptations or further development to be applicable to a broad range of application areas. In general, data availability poses a challenge, and existing projects and programmes suffer from a lack of cost data. Elaborated programmes such as LEGEP follow a rather analytical approach and are less suitable to be used as a forecasting model to be applied in the early design phase. On the international level, focus of activities is on life cycle analysis (LCA) which deals with the inventory of building related input and output data on material, energy, water, soil, emissions, waste and the environmental impact being linked up with them.

In this project, a life cycle cost forecasting model has been developed. The model is based on cause/effect relations between different types of building qualities and the related costs of ownership which have been determined by means of statistical analysis of data records of the benchmark-database operated by the Immobilien-Benchmark-Institute of Fachhochschule Kufstein (University of Applied Science). The second phase of the project was focused on completion and verification by means of building specific data analysis. Concerning the system boundaries of the model, it was agreed to focus on energy aspects.

Life cycle cost calculations have to take into account the following cost categories:

1.  construction cost,
2. operation cost,
3. maintenance cost,
4. demolition cost.

The IBI-benchmark-database provides operation cost and maintenance cost for detailed analysis. Construction cost and demolition cost are not available and had to be calculated based on other sources. Construction costs were calculated based on the data compilation “BKI-Baukosten”, and results were used in the forecasting model. Concerning demolition cost, a simplified approach has been developed based on existing guidelines.

The final forecasting model focuses on the empirical-statistical analysis of level 1 (planning phase, low level of detail). For more detailed work, the analytical approach will be useful, e.g. in the form of object-specific case studies and targeted empirical analysis regarding energy aspects.

With regard to the dissemination of the forecasting model after completion of the project it is important to consider the following requirements: modern tools have to be user-friendly, independent of platforms, and suitable for multi-purpose use. Solutions with comprehensive installations and complex conditions do not fit for practical use and thus will not be accepted by the market.

Project management

Mag. Dr. Susanne Geissler
Österreichische Energieagentur

Project collaborator

DI (FH) Maike Groß

Project or cooperation partner

• Mag. (FH) Sebastian Keiler
  Fachhochschule Kufstein, Tirol
• Günter Neumann, MSc
  Neumann & Partner – CREIS Immobilien
• Ing. Andreas Oelinger
  BBRZ Group
• Dr. Torben Bernhold
  FH Münster – ILF
• DI Birgit Schuster
  Forschungsgesellschaft für Wohnen, Bauen und Planen – FGW
• Mag. Karin Sammer
  Österreichischer Verband der Immobilientreuhänder – ÖVI

Österreichische Energieagentur - Austrian Energy Agency
Mag. Dr. Ulrike Radosch
Mariahilfer Straße 136, 1150 Wien
Tel.: +43 (1) 586 15 24
Fax: +43 (1) 586 15 24-340
E-Mail: ulrike.radosch@energyagency.at
Web: www.energyagency.at