Whole Life Costing is a methodology for determining the costs associated with an asset over a period of time.
It is a common undertaking in both the public and private sectors. Typically, assessments are made over a 20-25 year period to understand what it will cost to operate, repair, replace and renew different building elements. These costs are then given a current value in order that an owner can make decisions about and plan capital investment.
The assessment will vary between buildings, but will typically consist of:
- Non-construction costs in acquiring the building
- Capital cost of construction / refurbishment / fit out / professional fees
- Rent / rates
- Provision of Facilities Management services, such as maintenance, cleaning, security
- Service charges / letting management fees
- End of life costs
Some Whole Life Costing assessments consider ‘externalities’ like the value of carbon or the cost of polluting the environment.
Whole Life Costing is important because it quantifies the ongoing cost of managing a building. This will normally be many times that of the initial acquisition / capital outlay at the beginning.