Office Operating Costs: What OPEX Includes and How to Calculate the Total Cost

Two offices may have the same floor area and rental rate yet cost a company very different amounts because of operating charges, utilities, parking, indexation and additional fees.

In commercial real estate, the term OPEX, or operating expenses, is commonly used for recurring building costs. These include maintaining engineering systems, security, cleaning common areas, management-company services and other building operations.

There is no universal list of OPEX items. One lease may include some expenses in the base rent, another may charge them separately, and a third may require the tenant to reimburse utilities and individual services.

Offices should therefore not be compared solely by price per square metre. To understand the true cost, compile all mandatory charges and calculate the budget for a year or the entire occupancy period.

OPEX in Simple Terms

Office OPEX comprises the recurring costs required for the normal operation of the premises and the building as a whole.

These costs arise whether the office is owned or rented. The difference is who contracts with service providers and receives the invoices.

In a rented office, operating charges may be collected by the owner or management company. When premises are owned, the owner pays for building services directly or through the building manager.

OPEX should be distinguished from the base rent.

Base rent — payment for the right to use the premises.

OPEX — payment for maintaining and operating the building.

Utility costs — the actual consumption of electricity, water, heating and other resources.

A particular lease may combine these categories or itemise them separately.

Why a Low Rental Rate Does Not Always Mean a Good Deal

Consider two 500 sq m office listings.

The first office has a higher rental rate but includes operating costs, some utilities and basic cleaning.

The second appears cheaper, but the following are charged separately:

• OPEX;
• electricity;
• water;
• additional cleaning;
• parking;
• access passes;
• maintenance of systems within the premises.

Once the annual budget is calculated, the second office may prove more expensive.

Therefore, when choosing an office in Moscow City request not only a presentation and the rate per square metre, but also a complete list of mandatory charges.

What Office Operating Expenses Usually Include

The composition of OPEX depends on the building, lease and management model. It most often includes costs associated with common areas and building-wide systems.

Building Maintenance

This category may include maintenance of:

• ventilation systems;
• air conditioning in common areas;
• heating;
• water supply;
• drainage;
• power supply;
• Elevators;
• escalators;
• fire-safety systems;
• building control systems;
• building automation;
• backup power sources.

Engineering infrastructure is especially complex in a high-rise business centre. Its operation requires permanent technical staff and regular preventive maintenance.

Cleaning Common Areas

This usually includes:

• The lobby;
• lift lobbies;
• Corridors;
• Staircases;
• shared washrooms;
• entrance areas;
• the surrounding grounds.

Cleaning inside the office may not be included in OPEX and may need to be arranged separately.

Security and Access Control

The operating charge may cover:

• 24-hour security;
• CCTV;
• staffing of security posts;
• the access-pass system;
• vehicle-entry control;
• the control-room service;
• emergency response.

Additional access passes or a dedicated security post inside the office may be charged separately.

Lift Maintenance

Lifts are one of the key engineering systems in a skyscraper.

Costs may include:

• routine maintenance;
• emergency repairs;
• monitoring and control;
• electricity for shared lifts;
• maintenance of service and fire-fighting lifts.

The more complex the building and the greater the number of lift groups, the larger this part of the operating budget may be.

Waste removal

Standard household-waste removal is usually part of building operations.

Construction waste after fit-out work, bulky items and special waste categories may be charged separately.

Business-centre management

The management company coordinates:

• operation of engineering systems;
• contractor services;
• emergency response;
• maintenance of common areas;
• communication with owners and tenants;
• document management;
• service quality control.

The management company's fee may also be included in OPEX.

Maintenance of surrounding grounds

Depending on the property, this may include:

• grounds cleaning;
• snow removal;
• maintenance of access roads;
• landscape maintenance;
• external lighting;
• maintenance of entrance areas;
• minor routine repairs.

What may not be included in OPEX

A common tenant mistake is to assume that the operating charge covers every office-related cost.

In practice, the following may be charged separately:

• electricity used inside the premises;
• water;
• heating;
• air conditioning within the office;
• office cleaning;
• internet connectivity;
• telephony;
• parking;
• additional access passes;
• reception services;
• use of conference rooms;
• repairs to tenant equipment;
• removal of construction waste;
• maintenance of a dedicated server room;
• property insurance;
• taxes;
• VAT.

Obtain a written explanation for each item.

The phrase “all inclusive” does not replace a lease appendix listing the services.

OPEX, Utilities and VAT: What Is the Difference?

These categories are often confused even though they are fundamentally different.

Charge	What the Company Pays For	How It May Be Calculated
Base rent	The right to use the office	Per sq m per month or year
OPEX	Maintenance of the building and shared systems	Per sq m or based on the operating budget
Utilities	Resources actually consumed	By meter readings or in proportion to floor area
Parking	Use of parking spaces	Per space per month
VAT	Tax, where applicable	A percentage of the taxable amount
Additional services	Office cleaning, reception and meeting rooms	At a set rate or under a separate agreement

When comparing listings, convert all figures to the same format.

For example, one rate may be quoted per square metre per year excluding VAT, while another is monthly and includes operating expenses. They cannot be compared directly.

How OPEX Differs from CAPEX

OPEX consists of recurring operating expenses.

CAPEX consists of capital investment in creating or improving a property.

CAPEX may include:

• interior design;
• fit-out;
• installation of partitions;
• engineering upgrades;
• purchase of furniture;
• meeting-room equipment;
• creation of a server room;
• installation of access-control systems within the office.

In simplified terms:

• OPEX keeps the office operational;
• CAPEX creates or substantially improves the office.

When buying premises, a company faces both categories of costs: it first invests in fit-out and equipment, then pays annual operating expenses.

How OPEX Is Calculated

Several models are used in practice.

Fixed Rate per Square Metre

The company pays a set amount for each square metre per month or year.

Formula:

Annual OPEX = office area × annual operating rate per sq m.

For example, if an office occupies 800 sq m and the illustrative operating rate is RUB 10,000 per sq m per year:

800 × 10,000 = RUB 8,000,000 per year.

Monthly payment:

8,000,000 ÷ 12 = approximately RUB 666,667.

This is an illustrative example, not the market rate for a specific property.

Allocation of Actual Expenses

The management company prepares the building budget and allocates it among owners or tenants in proportion to the floor area they occupy.

A reconciliation may be carried out at the end of the period:

• if actual expenses were higher, an additional charge is issued;
• if they were lower, an adjustment may be made.

Under this model, it is important to understand how the budget is prepared and which documents support the expenses.

Mixed Model

Some services are charged at a fixed rate and others according to actual consumption.

For example:

• security and lift maintenance — per sq m;
• electricity — by meter readings;
• water — based on actual use;
• additional cleaning — at a separate rate.

This model reflects consumption more accurately but makes budgeting more complex.

How to Calculate the Total Cost of Renting an Office

An accurate comparison requires calculating not only OPEX but the total cost of occupying the premises.

Use the following formula:

Total office cost = base rent + OPEX + utilities + parking + additional services + taxes.

Where VAT applies, it should be included in accordance with the lease terms.

Illustrative Calculation

A company is considering a 1,000 sq m office.

Assumptions:

• base rent — RUB 50,000 per sq m per year;
• OPEX — RUB 10,000 per sq m per year;
• utilities — an illustrative RUB 2,500 per sq m per year;
• eight parking spaces — RUB 40,000 per month each;
• additional office cleaning — RUB 150,000 per month.

Base rent

1,000 × 50,000 = RUB 50,000,000 per year.

OPEX

1,000 × 10,000 = RUB 10,000,000 per year.

Utilities

1,000 × 2,500 = RUB 2,500,000 per year.

Parking

8 × 40,000 × 12 = RUB 3,840,000 per year.

Cleaning

150,000 × 12 = RUB 1,800,000 per year.

Total before taxes

50,000,000 + 10,000,000 + 2,500,000 + 3,840,000 + 1,800,000 = RUB 68,140,000 per year.

The stated base rent was RUB 50 million, but the actual budget was more than RUB 18 million higher.

All figures in this example are illustrative; its purpose is to demonstrate the calculation method.

How to Calculate the Cost per Workstation

Businesses should calculate not only cost per square metre but also cost per workstation.

Formula:

Monthly cost per workstation = total monthly office costs ÷ number of workstations in use.

If an office costs the company RUB 6 million per month and contains 150 workstations:

6,000,000 ÷ 150 = RUB 40,000 per workstation per month.

This calculation helps to:

• compare several offices;
• assess space efficiency;
• compare a conventional lease with a flexible office;
• analyse a hybrid format;
• make expansion decisions.

If some workstations are regularly vacant, the actual cost per occupied workstation will be higher.

What Operating Expenses Does an Office Owner Incur?

Buying premises does not eliminate recurring costs.

The owner continues to pay for:

• maintenance of common areas;
• maintenance of engineering systems;
• security;
• building management;
• utilities;
• repairs within the premises;
• insurance cover;
• taxes;
• Parking;
• replacement of equipment;
• a reserve for major works.

When comparing buying and renting, consider costs over the entire ownership period, not just the purchase price.

A detailed comparison of the two scenarios is provided in the article “Buying or Renting an Office in Moscow City: Which Is More Cost-Effective?”.

How to Account for OPEX in an Investment Purchase

For an investor, operating expenses have a direct impact on net income.

Yield cannot be calculated solely as:

Rental income ÷ purchase price.

Deduct the following from rental income:

• owner’s expenses;
• vacancy periods;
• fit-out;
• brokerage fees;
• taxes;
• insurance cover;
• any rent-free periods granted to the tenant;
• costs of replacing engineering equipment.

The resulting figure will be closer to the actual yield.

Pay particular attention to which operating expenses can be passed on to the tenant and which remain with the owner.

When assessing investment in Moscow City commercial real estate OPEX should be included in the financial model before the property is purchased.

Why OPEX Differs Between Business Centres

Operating expenses depend on more than the building’s class.

The total is affected by:

• the age of the property;
• the complexity of engineering systems;
• the number of lifts;
• the building’s height;
• the size of common areas;
• the level of security;
• cleaning quality;
• staffing levels;
• operating hours;
• backup power;
• façade architecture;
• the air-conditioning system;
• parking;
• landscaping;
• the management model.

A high-quality building may cost more to operate while providing reliable engineering systems, better service and faster fault resolution.

Low OPEX is not an advantage if the management company cuts spending on preventive maintenance, cleaning and technical staff.

When assessing Class A offices in Moscow City compare not only the amount charged but also the services received in return.

How to assess whether the operating charge is justified

A single figure per square metre says nothing about the quality of service.

Ask the owner or management company for:

• a list of services;
• the operating budget;
• the annual indexation procedure;
• the reconciliation rules;
• a list of additional charges;
• rates for services above the standard allowance;
• reports for previous periods;
• the procedure for major repairs;
• the responsibilities of each party;
• fault-resolution timeframes.

It is also useful to speak with current tenants or unit owners.

They can tell you:

• how quickly emergencies are resolved;
• whether unexpected charges occur;
• how the access-control system works;
• whether there are enough technical staff;
• how well the common areas are maintained;
• how often the lifts break down;
• how straightforward it is to obtain approvals.

What to check in a lease agreement

Operating expenses should be described as specifically as possible.

Check the following points.

What the charge includes

The agreement or an appendix should include a list of services.

The phrase “building maintenance costs” is too broad unless the agreement explains exactly what is included.

How the charge can change

Confirm:

• whether OPEX is fixed for the year;
• whether indexation applies;
• which benchmark it is tied to;
• whether the owner can increase the charge unilaterally;
• whether there is an annual reconciliation.

How utilities are accounted for

Check:

• whether individual meters are installed;
• how shared building costs are allocated;
• whether heating and cooling are included;
• who pays for the server room's electricity;
• which tariffs are used.

Which services are charged separately

Ask for the rates for:

• Parking;
• additional access passes;
• out-of-hours operation;
• office cleaning;
• use of meeting rooms;
• delivery of bulky items;
• waste removal;
• approval of fit-out work.

What happens in an emergency

Make sure you understand:

• who is responsible for equipment inside the premises;
• who repairs the building-wide systems;
• the timeframes for resolving faults;
• whether compensation is available if access is restricted for an extended period.

When considering a specific property, it is also useful to review the terms and office costs in Federation Tower.

How to reduce operating expenses

Negotiating the charge is not the only way to reduce OPEX.

Choose an efficient floor plan

The more unused corridors, awkward corners and vacant rooms there are, the more the company pays for space that delivers no value.

Monitor actual consumption

Useful measures include:

• separate meters;
• automatic lighting;
• temperature controls;
• switching off equipment;
• monitoring the server room;
• energy-efficient equipment.

Check the building's operating hours

If the office operates around the clock, some services may carry additional charges.

Ask in advance about the cost of:

• overnight air conditioning;
• weekend access;
• additional security;
• technical support outside standard hours.

Review the number of workstations

A large office with low actual occupancy increases the cost per workstation.

It may be more efficient to:

• revise the seating plan;
• introduce hybrid working;
• bring teams together;
• sublet part of the space;
• give up unused rooms.

Review additional services

A company may be paying for services it rarely uses:

• enhanced cleaning;
• surplus parking spaces;
• additional storage space;
• a dedicated security post;
• seldom-used meeting rooms.

How to calculate OPEX before leasing: a step-by-step guide

Step 1. Put the base rent in a consistent format

Confirm the annual cost per square metre and whether VAT is included.

Step 2. Request the operating charge

Confirm the OPEX amount and the complete list of included services.

Step 3. Separate utility costs

Confirm which utilities are included in OPEX and which are billed by meter.

Step 4. Add parking

Estimate the required number of permanent and visitor spaces.

Step 5. Include in-office services

Add cleaning, internet, communications, security, the server room and consumables.

Step 6. Check indexation

Calculate costs not only for the first year, but for the entire anticipated lease term.

Step 7. Calculate the cost per workstation

Divide the monthly budget by the number of workstations actually in use.

Step 8. Compare several properties

Use one table and the same parameters for every offer.

Office comparison table

Metric	Office 1	Office 2	Office 3
Area
Base rent
OPEX
Utilities
VAT
Parking
Office cleaning
Internet and communications
Additional services
Annual indexation
Total monthly cost
Total annual cost
Cost per workstation

A table like this can change the initial choice. An office with a higher base rent may offer better value if its terms are transparent and it has fewer additional charges.

How to assess the costs of a large headquarters

The cost structure becomes more complex in a large office.

In addition to standard OPEX, costs may arise for:

• dedicated access-control systems;
• an in-house reception;
• round-the-clock operation;
• internal security;
• multiple server rooms;
• multimedia equipment;
• maintenance of staircases between levels;
• events;
• enhanced cleaning;
• additional parking spaces;
• maintenance of executive and client-facing areas.

For a company of this kind, it is particularly important to calculate the budget by function as well as per square metre.

For example, work areas, conference facilities and executive floors may have different operating costs.

Operating expenses at F-375

The F-375 office penthouse occupies 2,642 sq m on the upper levels of Federation Tower East.

The three-level layout brings together:

• workspaces;
• executive offices;
• the principal executive area;
• meeting rooms;
• executive and client-facing spaces;
• event spaces.

When budgeting for a property like this, both the floor area and the intended use of each level must be considered.

Costs may be affected by:

• the number of employees;
• operating hours;
• the load on climate-control systems;
• the number of events;
• security requirements;
• the use of multimedia equipment;
• the level of cleaning service;
• visitor access arrangements.

The exact budget is calculated from the operating conditions, technical specifications and intended use of the premises.

Common mistakes when calculating OPEX

Comparing only the base rent

It does not show the office's full cost.

Failing to check whether VAT is included

Offers that look identical at first may be quoted in different formats.

Assuming utilities are included in OPEX

They may be included in one building and charged separately in another.

Ignoring indexation

A small difference in the first year may become significant over a longer term.

Failing to request a breakdown of the charge

Without a list of services, it is impossible to assess whether the charge is justified.

Ignoring parking costs

Parking may account for a significant part of the budget for a client-facing office.

Forgetting CAPEX

Low rent for an unfinished space may require substantial upfront investment.

Failing to calculate the cost per workstation

A large floor area is not always used efficiently.

In brief: what you need to know about OPEX

OPEX is the recurring cost of operating a building and its shared systems.

It may include:

• technical maintenance;
• security;
• cleaning of common areas;
• lifts;
• monitoring and control;
• building management;
• grounds maintenance.

Utilities, office cleaning, parking, internet and additional services may be charged separately.

Before leasing or buying, obtain a complete list of charges, put all figures in a consistent format and calculate the annual budget.

See an example of a large multi-level space with an individually calculated operating model on the office in Federation Tower.

Frequently Asked Questions

What is OPEX in an office lease?

OPEX covers recurring costs for maintaining the building, engineering systems and common areas. It may be charged separately from the base rent.

What is usually included in office operating expenses?

Typically, building maintenance, security, common-area cleaning, lift operation, control-room services, management and grounds maintenance.

Are utilities included in OPEX?

Not always. Electricity, water, heating and cooling may be included in the operating charge or billed separately.

How do you calculate office OPEX?

If the charge is set per square metre, multiply the office area by the annual or monthly operating rate.

How does OPEX differ from rent?

Rent pays for the right to use the premises, while OPEX covers the cost of operating the building.

How does OPEX differ from CAPEX?

OPEX is recurring expenditure on running an office. CAPEX is investment in fit-out, equipment and the creation of the space.

Do owners still pay OPEX after buying an office?

Yes. Owners continue to pay for maintenance of the building, engineering systems and common areas, along with other recurring costs.

How do you compare the cost of several offices?

For each property, add the base rent, OPEX, utilities, parking, VAT and additional services, then calculate the annual budget.