The table below a summary of operating costs for certain commercial buildings prepared by an industry body. The latest costs should be the standard or datum against which the subject building should be compared. If a major discrepancy is found, it should be analyzed to determine its cause.
TYPICAL OPERATING COSTS FOR A CBD BUILDING @ 2002
$/m2
|
|
<4500 m2 NLA |
>4500 m2 NLA |
||||
|
|
Lower |
Median |
Upper |
Lower |
Median |
Upper |
|
OPERATING INCOME |
|
|
|
|
|
|
|
Rental income |
168 |
275 |
306 |
250 |
280 |
300 |
|
GROSS INCOME |
190 |
303 |
341 |
255 |
290 |
345 |
|
STATUTORY CHARGES |
|
|
|
|
|
|
|
Rates |
4.5 |
8.0 |
10.0 |
1.5 |
2.5 |
3.0 |
|
Water rates |
2.0 |
2.5 |
3.5 |
2.0 |
2.5 |
3.0 |
|
Land tax |
5.0 |
9.5 |
14.0 |
2.0 |
3.0 |
4.0 |
|
Other stat charges |
0.5 |
1.0 |
1.5 |
na |
na |
na |
|
TOTAL STATUTORY CHARGES |
12.0 |
21.0 |
29.0 |
5.5 |
8.0 |
10.0 |
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
Insurance premiums |
1.5 |
3.5 |
4.5 |
1.0 |
1.5 |
2.0 |
|
A-C/ventilation |
4.5 |
6.5 |
7.5 |
4.0 |
5.0 |
6.5 |
|
Common area cleaning |
3.5 |
6.5 |
8.5 |
1.0 |
2.0 |
3.0 |
|
Building supervision |
2.0 |
2.5 |
3.0 |
1.0 |
1.5 |
2.0 |
|
Carparking |
na |
na |
na |
na |
na |
na |
|
Electricity |
8.5 |
10.5 |
13.0 |
7.0 |
8.0 |
11.0 |
|
Fire protection/public address |
1.5 |
2.0 |
2.5 |
1.0 |
1.5 |
2.0 |
|
Gas & oil |
na |
na |
na |
na |
na |
na |
|
Lifts & escalators |
2.0 |
3.5 |
4.0 |
1.5 |
2.0 |
2.5 |
|
Pest control |
na |
na |
na |
na |
na |
na |
|
Repairs & maintenance |
1.5 |
3.0 |
6.0 |
3.5 |
4.5 |
5.5 |
|
Emergency generators |
na |
na |
na |
na |
na |
na |
|
Energy mgmt/building auto systems |
na |
na |
na |
na |
na |
na |
|
Security/access control |
1.0 |
1.5 |
2.0 |
na |
na |
na |
|
Gardening/landscaping |
1.0 |
1.5 |
2.5 |
na |
na |
na |
|
Administration/management fee |
5.0 |
7.0 |
9.0 |
3.0 |
3.5 |
9.0 |
|
Miscellaneous |
0.5 |
1.0 |
1.5 |
0.5 |
1.0 |
2.5 |
|
TOTAL OPERATING EXPENSES |
32.5 |
49.0 |
64.0 |
23.5 |
30.5 |
46.0 |
|
TOTAL EXPENDITURE |
44.5 |
70.0 |
93.0 |
29.0 |
38.5 |
56.0 |
|
Recoverable expenses |
na |
na |
na |
na |
na |
na |
Note particularly that the costs/m2 of large buildings is substantially less than for small buildings. This is because of the ability to use large and efficient plant and equipment.
Operating costs will also vary according to locality and climate. For example, of all the capital cities, Canberra and Melbourne have the highest operating costs because of they have colder and more inclement weather.
See
commercial
office block - valuation example