V B Johnson LLP Whole Life Costs Services Page

Whole Life Costs Services

In the past, the capital cost of a building, i.e. the cost of constructing the building, has been largely the only cost considered as a project cost. Whole life costing considers the costs associated with the life of the building. It produces the net present value of an asset over its operating life or defined period. Whole life costs may include the following:

Initial capital costs
Financing costs
Operational costs
Maintenance, repair, replacement and alteration costs
Occupancy costs
Residual values

Building life is influenced by obsolescence, identified in six different forms:

Physical - when the building is likely to collapse through structural failure
Defined - when occupancy of the building ends under the terms of an agreement (although the building may have a future life under another agreement)
Economic - when occupancy of the building is not considered to be the least cost alternative of meeting a particular objective
Functional - when a building ceases to function for the same purpose as that for which it was built
Social - when popular demands dictates a replacement other than for economic considerations
Legal - when legislation dictates a replacement other than for economic considerations

Building whole life costs should be considered as part of the feasibility and option studies carried out at the Capital Planning stage. Only by doing this can a true comparison of options be obtained. For example, a building with a low capital cost but high maintenance and repair cost may have a higher net present value than a building with a higher capital cost but lower maintenance and repair cost, and therefore offer worse value to the client over the life of the building. At V B Johnson we employ specialist whole life costing software and can produce whole life cost studies for any type of building.

Please contact us for more details about any of these services.

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Whole Life Costs Services