Christian Stoy

Time–cost relationship of building projects: statistical adequacy of categorization with respect to project location

Construction duration is one of the key elements to determine the success of a project. Several models have been developed to provide precise predictions of construction duration. The datasets in previous studies comprise observations from particular countries. This precludes examination of the role of project location at the country level for modelling construction duration. The aim, therefore, is to test the statistical adequacy of categorizing projects with respect to their locations for modelling construction duration. A formal procedure to evaluate the adequacy of categorizing observations is also presented. It is intended to contribute to the epistemology of modelling construction duration. The dataset was generated from a global client. It contains information on 246 projects from 25 different countries. This creates a categorical variable for location. Bromilow’s time–cost model is chosen to assess the adequacy of this categorization. A full model with indicator and interaction variables is compared to a restricted one. Parameter estimation was performed according to the ordinary least squares method. F‐statistics are calculated and the probability of the value is significant. The results show that two distinct groups with substantial changes in model parameters exist in the dataset. It is also noted that conclusions are valid over the selected population.

Estimating buildings' energy consumption and energy costs in early project phases

Purpose – The purpose of this paper is to show that building stock is currently one of the largest energy consumers. It is thus imperative that buildings are optimally planned, constructed, and used from both the environmental and the economic point of view. Cost models are relevant tools for achieving this objective as they can be used to estimate the occupancy costs in early project phases including energy costs.Design/methodology/approach – In the paper a regression model for predicting the energy consumption and energy costs of office buildings is developed based on the results of a survey conducted in 80 Swiss office properties.Findings – The proposed energy cost model shows good agreement with the observed field data. The mean absolute percentage error resulted in 12 per cent. Validation tests using five properties not used for the model development revealed percentage errors ranging between −17 per cent and 7 per cent. The proposed concept and the presented cost model can be used as a basis for fut...

The application of a benchmarking concept

Purpose – Today, the occupancy cost of owner‐operated property is the second or third largest cost factor for many companies. Benchmarking projects that focus on occupancy cost comparisons are, therefore, becoming increasingly important. Such projects must contrast comparable properties since the comparison otherwise cannot produce meaningful results. The paper aims to focus on the issues involved.Design/methodology/approach – An occupancy cost benchmarking concept is explained using the example of a Swiss portfolio of office buildings used for own operations. The chosen approach works primarily with known cost drivers that are used in the selection of suitable benchmarking properties.Findings – The benchmarking concept enables the benchmarking of comparable properties. In addition to a pure benchmarking, it also allows the reasons for cost differences between the properties under consideration and the specific benchmarks to be identified. Recommended actions can be derived from the comparison.Practical i...

Construction duration of residential building projects in Germany

Purpose – Planning the construction duration is an important consideration in any construction project. Indicators that permit an early forecast of the duration provide the basis for such planning. To date, such a basis has been lacking in the German‐speaking area. This paper aims to discuss this matter.Design/methodology/approach – Indicators are identified that enable a forecast of the construction duration. In addition, a simple regression model is provided to assist in selecting construction speed indicators. This empirical analysis relies on the data, collected on a uniform basis, from 115 German residential buildings.Findings – Project size (measured in m2 gross external floor area) and project standard (measured in € building construction cost/m2 gross external floor area) are found to be significant drivers of construction speed. It appears that project size, in contrast to the project standard, is positively correlated with construction speed.Originality/value – An expansion of the data pool is r...

Strategies of corporate real estate management: Strategic dimensions and participants

Nowadays, the so‐called management by objectives (MBO) is used as a management instrument of corporate real estate management (CREM), using cost targets as the yardstick of CREM success. In Switzerland, CREM success is increasingly linked to cost reductions, with the cross‐company corporate strategy often requiring CREM to deliver a significant reduction in the level of cost. The cost concept used is material for the agreement or stipulation of cost targets. As the presented analysis shows, CREM has, for the most part, only very limited potential impact on costs. In particular, the use of the occupancy cost concept (sum of all imputed costs as well as costs recognised in the profit and loss account) poses a problem. This comprehensive cost type is determined by the following factors, which are in many cases outside the control of CREM: Book value as per balance sheet; Depreciation period of the basic shell structure; Main objective of the owner; Maintenance strategies; Degree of outsourcing of infrastruct...

Occupancy costs: a method for their estimation

Purpose – Today the costs of real estate are the second or third largest cost factor in most companies. The planning of so‐called occupancy costs, therefore, plays a particularly important role. Cost models that permit a forecast of these costs serve to assist in such planning. The objective of this study is to support occupancy cost planning and benchmarking.Design/methodology/approach – Two regression models are presented. They permit a forecast of total occupancy costs as well as the subset of these costs that is recognized in the profit and loss account. Both models are based on 70 Swiss owner‐operated office buildings.Findings – The forecast accuracy with mean absolute percentage errors (MAPEs) of 10 and 11 percent can be classified as good. The quality of the cost models is further tested on the basis of ten additional properties that were not used for building the models. The forecast accuracies again prove to be comparatively high (absolute percentage errors from 2 to 18 percent and from 0.2 to 25...

Determinants of construction duration for building projects in Germany

Purpose – Construction duration is referred to as one of the most crucial success elements for a construction project along with quality and cost. Modelling construction duration supports decision making at the early stages of a project. Exploring the complex structure of construction duration is necessary; hence this forms a basis to develop a predictive model. Therefore the main aim of this study is to determine the subset of variables for a descriptive model that explains the most substantial part of the variation in construction duration.Design/methodology/approach – Secondary data set which includes 1,695 observations with 30 quantitative and four qualitative variables was utilized. Multiple linear regression was employed to define the relationship between explanatory variables and construction duration. General procedure for variable selection was presented in detail for data sets that suffer multicollinearity and singularity.Findings – Analysis indicated that gross external floor area and cost of c...

Cleaning management of owner‐operated real estate

Purpose – The costs of cleaning owner‐operated office buildings amount to an approximate 20 per cent share of the operating costs. As a result of their cost relevance and the growing cost pressures on real estate divisions, cleaning costs are increasingly coming under focus. This interest manifests itself in the search for cost indicators and their drivers to be used as a basis for the management of real estate. This paper seeks to address this issue.Design/methodology/approach – A study of the specialist literature revealed, from a theoretical perspective, the relevant drivers of cleaning costs. The empirical study is based on cost and property information collected, on a uniform basis, from over 100 owner‐operated office buildings in Switzerland, with the analysis of cost drivers being carried out using regression analysis.Findings – The cleaning cost indicators of the examined properties revealed a median of 41 CHF/m2 usable floor area and year. With regard to cost drivers, it was established that both...

Benchmarking electricity consumption

The building stock is one of the largest energy consumers and simultaneously represents a relevant cost driver for most companies. Thus, buildings should be optimally planned, constructed and used from both an environmental and from an economic perspective. Benchmarking electricity consumption in the usage phase is a tool for achieving this objective. This requires a uniform collection of key usage indicators on the one hand, and on the other hand it is necessary to be cognisant of the factors that drive these key indicators and how they do so. This alone makes it possible to satisfy the benchmarking principle of comparing like or similar objects. Uniformly collected key indicators for electricity consumption (kWh/m2 usable floor area and year) are presented on the basis of 109 Swiss office buildings. This is broken down into further groupings on the basis of the relevant drivers. The analysis of the drivers relies on regression analysis. This demonstrates above all the great relevance of technical installation (e.g. the share of mechanically vented and ventilated as well as air‐conditioned areas), given that the coverage area of such systems has a significant effect on the electricity consumption of office buildings. Accordingly, special attention should be paid to the planning, construction and use of technical installations, in order to be able to provide optimally energy‐efficient buildings.

The determination of occupancy costs during early project phases

In addition to the earnings, costs determine the commercial success of real estate investments. The discussion in the German‐speaking region focuses on occupancy costs and their planning. When planning, the occupancy costs must be determined early, continually monitored, and controlled if necessary. A process for determining occupancy costs, the construction element process, is presented and tested using an actual property. The test results deviate by only approximately 8% from the occupancy costs actually incurred. The process demonstrates its suitability for the early determination of occupancy costs using only a few pieces of data on the property. However, it does require occupancy cost indicators. Also, the significant drivers of these indictors must be known in order to select the appropriate indicator. For this reason, future work on occupancy costs must not only collect additional data, but the data must also be analysed with regard to the cost drivers.