01 / Understanding lifecycle costs and asset replacement in buildings

It is well understood that lifecycle costs (LCC) often exceed the initial construction costs over an asset’s lifetime. Therefore the specification and design processes are critical factors in influencing future replacement costs and long‑term value. 

Assets with longer life expectancies are likely to require replacement less often, but they may be more expensive to replace. However, some asset owners may prefer the more frequent asset replacement, as design trends and user expectations in their specific markets may change more quickly than an asset’s life expectancy. 

Another key factor in LCC is sector, as the building’s purpose dictates the design, the installed assets and their usage patterns.

LCC is covered in BS/ISO 15686-5, which outlines the main principles, processes, calculations and definitions. The standardised method of LCC defines lifecycle costing as “a methodology for the systematic economic evaluation of lifecycle costs over a period of analysis, as defined in the agreed scope”.

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