Life cycle cost of university buildings

The theoretical background for a life cycle cost model of a building is described. Data relating to a 30-year-old building at the University of Melbourne are used as the basis for estimating long-term resource requirements, for comparing them with what has actually happened so far, and for future management of the building. The results demonstrate quantitatively the need to plan for substantial variability in necessary annual costs in real terms. Although the long-term (100 year) average annual cost of maintenance and rehabilitation is 2.0% of the cost of the building studied, the pattern of expenditures is such that 1.1% invested annually at 6% p.a. real interest rate, would fund these operations indefinitely. Demolition and replacement of the building studied is not an economic proposition. Implications for university facility management are discussed. The basic methodology is applicable to other classes of constructed facility.