How much does building maintenance cost?
Key points
The annual maintenance costs for an office building in the US is between US$1.6/ft2 and up to US$2.8/ft2 for high end (US$17.3/m2 and US$30/m2), depending upon whether the building quality.
For buildings in the Europe annual maintenance costs are between US$1.7/ft2 and US$2.5/ft2 for high end (US$18.6/m2 and US$27.4/m2).
For Asia there is a wide variation depending upon location, but the average annual maintenance costs are between US$1.0/ft2 and US$1.4/ft2 for high end (US$11.3/m2 and US$15.3/m2).
For most buildings, 30% to 40% of individual asset items will contribute to 80% to 90% of the maintenance costs. So, by targeting efficiency on these items is the best place to look for savings.
Maintenance cost data
Detail is provided below, by city and building type.
The maintenance costs of buildings have increased significantly over the past 5 years, with at least a 15% increase in most markets.
To provide general rules to assess cost of maintenance we do need to generalize, but it is normal to do this for many elements of budget costing in the construction industry. It is useful to be clear about what we consider as maintenance activity to avoid confusion and perhaps to be sure that the omitted costs are covered elsewhere in the budgeting exercise.
What we included in maintenance
When we talk of maintenance, we mean repair, regular replacement and general maintenance activities. This includes scheduled maintenance to keep mechanical systems in working order, preventive maintenance to upkeep systems before they break down, and actual repairs of the building’s mechanical systems.
It includes the repair and refurbishment or hard surfaces and any part of the building for normal wear and tear. So, occasional repainting of internal walls and the repair of occasional damage would be included. The refurbishment of the external façade, canopies and any regular repair and maintenance activities would be included.
Most buildings experience significant changes of use during their life cycle, such as the refitting for change of use of internal spaces and with commercial or public facing buildings, there may be significant refurbishment to reflect revised branding or just to reflect the dynamic style of the business. Such major changes would usually be considered by the Asset Managers as identifiable independent projects that are funded from CAPEX budget. Such work is not included in these assessments.
What is not included in maintenance costs
Do not confuse building Management Cost with maintenance costs. It is very usual for commercial buildings to be managed by a property company, such as Savills or CBRE and others. These companies are often not the owners of the buildings, they just manage the building on behalf of an owner, or in some cases the owner is the manager also. Whatever the arrangement, it is usual for a tenant to pay a Management Charge as part of their rental costs, and what this charge covers can vary from place to place and depending upon the type of building and tenants. As a guide, a property management firm for a commercial building will charge between 8% to 15%.
Maintenance costs also do not include:
Any relevant property taxes
Insurance for buildings or people
Cleaning (janitorial) services
Utility bills, for water, power, gas or communications or the energy used for centralized cooling or heating
Security, including concierge services
Commodity supplies, including washroom consumables
Any amortization of any CAPEX items
Annual building maintenance costs for London
Annual building maintenance costs for New York
Annual building maintenance costs for Tokyo
Annual building maintenance costs for Singapore
Annual building maintenance costs for other cities
You can find the data for all these cities by downloading the spreadsheet by here.
Conclusion
To provide general rules to assess cost of maintenance we do need to generalize, but it is normal to do this for many elements of budget costing in the construction industry. As a guide, a property management firm for a commercial building will charge between 8% to 15%.
Maintenance costs also do not include property taxes, insurance for buildings or people, cleaning (janitorial) services, utility bills, security, including concierge services, commodity supplies, and amortization of any CAPEX items.
The annual maintenance costs for an office building in the US is between US$1.6/ft2 and up to US$2.8/ft2 for high end (US$17.3/m2 and US$30/m2), depending upon whether the building quality.
For buildings in the Europe annual maintenance costs are between US$1.7/ft2 and US$2.5/ft2 for high end (US$18.6/m2 and US$27.4/m2).
For Asia there is a wide variation depending upon location, but the average annual maintenance costs are between US$1.0/ft2 and US$1.4/ft2 for high end (US$11.3/m2 and US$15.3/m2).
For most buildings, 30% to 40% of individual asset items will contribute to 80% to 90% of the maintenance costs. So, by targeting efficiency on these items is the best place to look for savings.
Collated by Paul Lengthorn
Chartered Engineer, MBA, BEng, member of the Institute of Asset Management (IAM) and independent practicing Consulting Engineer
