Operating and investment costs

In the development of construction projects we are increasingly being asked to look at the operating costs for the whole life cycle. Operating costs are defined as the costs arising from the ownership or use of property and have a time component.  Clearly therefore operating and investment cost can have a major impact on each other. For example, energy saving measures can entail higher investment costs, but this can eventually be recovered via lower operating costs. Therefore the running costs can directly affect the initial development and have an effect on the investment decision.

Understanding operating costs

Maintenance, waste processing, logistics, facility services, energy and water management - there are various costs associated with operating a building. If these are not consciously included in the development of the construction project, there is a risk that some operating costs will rise sharply over the life of the building. This can have negative consequences for the operation itself: for example, if the building becomes less attractive for your users due to the high energy costs, or if necessary functional changes suddenly turn out to be very expensive.

As sustainable building becomes more and more in the spotlight, the development of long-term exploitation strategies becomes increasingly important. It is not the initial costs that predominate, but the total costs over the life of the building. The operating costs are of course part of this and, just like the investment costs, will have to be well managed to keep future risks under control.

There is a format laid down in NEN 2699 which sets out a scheme for expressing operating costs in a standardized way. By combining these with the distinctive IGG model we can provide our customers with defined costs for the options, clearly and accurately.

Costs are set out in the below categories:

  • Finance: financing, depreciation, lease, rent and any loss of rent, taxes, insurance costs;
  • Energy costs: electricity, gas, water and other energy;
  • Maintenance costs: costs for technical maintenance and cleaning;
  • Administrative management: rental costs, agency costs, accounting, personnel and administration;
  • Specific operating: surveillance, security.

For non-Dutch clients we have an easy method to portray these costs, the format may vary from what you are used to but our reporting can be amended in our program to present figures as you wish.A re you looking for a comprehensive overview on the operation and lifetime costs?  The specialists of IGG have all necessary expertise at their fingertips and can give you preliminary advice to help you develop your project. Please contact our team at IGG.

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Questions about this project? Please ask our experts!

Arno Vonk MRICS

Directeur / Senior bouw economisch adviseur

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John Koks

Senior bouw economisch adviseur / Projectcoach

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Mario van Veen

Bouw economisch adviseur / Projectleider

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Yuk Ling Chung

Bouw economisch adviseur

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Marc Hengstmangers

Directeur / Senior bouw economisch adviseur

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Hans Smit RKN

Register kostenmanager (RKN) / Projectcoach

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