Building Investment Index: A Decision-Making Tool to Optimize Long-Term Investment Decisions

Abstract

It is increasingly important for the architecture, engineering and construction (AEC) practitioners to justify not only the initial capital investments needed at an early stage of a building project but also all other subsequent costs throughout the building life cycle. These involve an understanding of the running costs of buildings in the use stage and also appropriate long-term capital investment planning (e.g. moment and cost) of future rehabilitation investments needs. But there is a lack of expedite decision support tools that can assist the future-proofing of design decisions at early stage of the building life cycle and link those to the economic life cycle performance of a building. Building investment index (BII) is proposed as an economic performance indicator. The results of this indicator are reported as time series representing the ratio between the fair value and the initial investment cost in each moment of the building life cycle. BII is applied in a case study of 166 public school building portfolio constructed in Portugal since 1942 and totally refurbished in 2009. The post-construction investment costs are estimated until 2071. It is demonstrated how the BII can be used to monitor and optimize long-term investment plans for building systems and subsystems (e.g. in 2071, end of the period of analysis, the BII value is 0.66 and capital investment is about 140% of the initial investment).