ABSTRACT

These days, the decision-making process as part of real estate management is largely determined by the expenses and benefits arising from the provision of real estate. While the benefits of real estate can often be measured by the gross rental income, the expense is reflected by the occupancy costs. Both factors determine the profitability of real estate and thus the success of real estate management.

This study focuses on the occupancy costs, which pursuant to DIN 18960 : 1999-08 encompass all recurring direct costs for buildings and the associated structures and land, whether they incur on a regular or irregular basis, from the time the building is useable until its demolition. The amount of occupancy costs always depends on the following factors:

?? Strategies (e.g. maintenance strategies)
?? Building characteristics (e.g. standard and condition of building services)
?? Location (e.g. compensation level of the region)
?? Usage (e.g. usable floor area/existing work space)

As variable factors, strategies and building characteristics form the focus of this study, with the potential work in practice resulting from their variability. As opposed to the location, these factors may also be influenced after the completion of the construction process. These factors therefore provide the opportunity to optimise occupancy costs on a long-term basis. Thus, in-depth knowledge of the cost drivers with a focus on strategies and building characteristics is indispensable.

Office buildings used in business form the basis for the examination of the causal relationships between occupancy costs and their drivers. The survey covers costs and all factors that could have an impact on the costs. The definition of the potential drivers is based on the study of secondary literature and expert interviews. The subsequent data analysis was performed using primarily multiple univariate regression analyses.

The outcome of the study is that it is predominantly the strategies (in the form of the book value as per the balance sheet and the depreciation period of the basic shell structure) that exercise significant influence over the occupancy costs. The strategies are key determinants of the level of imputed costs (cost of equity and depreciation) and therefore also of the occupancy costs. In contrast, the impact of the building characteristics (standard and condition of building services, in particular) becomes evident only in terms of the costs recognised in the profit and loss account (administrative costs, costs of utilities, waste disposal, cleaning, repair and maintenance). However, due to their share of only 40 % in the occupancy costs, the costs recognised in the profit and loss account are secondary by comparison with the imputed costs.