Creating a defensible recapitalisation programme

Recapitalisation is the planned replacement of facility subsystems, such as roofs, utilities, heating, ventilation and air conditioning. Recapitalisation initiatives continually suffer from the abrupt blows of the CFO axe more than any other real estate and facilities worktype request. In many respects, this harsh treatment results from poor business‐case analysis and the lack of a universally accepted methodology for structuring recapitalisation programmes. This paper will provide methods for using standardised tools and analytical capability to create more defensible recapitalisation programmes. The paper will address several methods for forecasting recapitalisation; dispense with any notion that recapitalisation can be planned for and defended using a flat‐rate method or formulaic approach; and introduce life‐cycle systems analysis in conjunction with the well‐known facility condition index and other scales to create meaningful recapitalisation forecasts.