By Arun Yuvarajah, Co-Founder, Projx - a project delivery platform for leading client-side property development and capital works teams
Published on October 11, 2026
Ever wondered what needs to be considered when owning a building asset?
For a commercial building, planning upgrades over 2–3 years (or 10) requires strategy, not just a list of repairs.
This article is about what the major commercial REITs consider when building a capital expenditure (capex) plan. What information they draw on, how they weigh trade-offs, and how they make a call if works get done now or later.
Building consultation firms highlight that Capex & Maintenance Reports are often done over 10-year horizons, assessing where a building's fabric or systems fall short. These reports break down recommended works and forecast their cost. Also, when public entities plan capital works, formal approval frameworks look closely at scope, cost certainty and risk. The Australian government's Capital Works Approval Process shows how much weight is placed on rigorous planning and governance.
Our blog on building a capital works budget covers how to translate condition report data and cost estimates into a structured, stage-by-stage budget.
Knowing these inputs is half the work. The real challenge is shaping them into a capex roadmap that’s executable.
Here's how:
Your capex plan will always be a balancing act.
You can't do it all. But you can make decisions that let you adapt, not get stuck.
Most REITs and other institutional clients still do their capex budgeting and forecasting in spreadsheets. The issue is that this information is seldom transferred into delivery and information is lost or misinterpreted.
Projx provides a platform where client-side delivery teams can input the projects, the scope, budgets, relevant documents (like business cases) and schedules.
When it comes time to pick up the project, the capital works team have all the information available in one place. They don’t have to go find that asset manager that’s gone on holiday to check the scope.
Projx also allows capital works teams to ‘group’ all the projects in an asset for the capital works year, and tag it as, say “CAPEX FY25/26”. Now, all information including budgets, expenditure and cashflow is aggregated across every project in that Program of Works.
From project inception, to planning, to delivery and handover - every aspect of the project is handled in Projx, so there is continuity of information.
The capital works portfolio management blog explores how aggregating project-level data into a program view gives asset owners the visibility they need to make better capital allocation decisions.
What is a capital expenditure (Capex) plan for a commercial building?
A Capex plan for a commercial building is a forward-looking investment roadmap that identifies, prioritises, and stages the physical works required to maintain, upgrade, and reposition a building asset over a defined period (typically two to three years or ten years). It draws on condition reports, lease obligations, sustainability strategies, market signals, and tenant requirements to determine which works are urgent, which can be deferred, and which deliver the strongest long-term return.
What information do you need to build a Capex plan for a commercial property?
A Capex plan draws on eight main inputs: condition and consultant reports (identifying where wear, risk, or failures are developing across façade, lifts, HVAC, and building systems); existing long-term plans; lease obligations and tenant commitments; asset and sustainability strategies; market and investor sentiment; functional trends such as hybrid work; and the scope and incentive obligations in new tenant leases. The challenge isn't gathering these inputs but weighing them against each other to produce a staged, fundable plan.
How do you prioritise works in a capital expenditure plan?
Prioritisation in a Capex plan is based on four filters: severity of risk (safety, compliance, and structural concerns rank first), business disruption potential, cost efficiency opportunities (works that can be bundled to reduce mobilisation costs), and strategic value (upgrades that improve competitive positioning or meet ESG commitments). Works that address critical compliance or safety failures are pulled forward regardless of cost; aspirational upgrades are staged when budgets allow and timed around tenant vacancies or lease turnovers.
What is the difference between maintenance expenditure and capital expenditure on a commercial building?
Maintenance expenditure covers the cost of keeping existing building systems and fabric in working condition: repairs, servicing, and like-for-like replacements that don't extend the asset's useful life or add value. Capital expenditure covers works that improve, upgrade, or extend the life of the building or its systems: façade refurbishments, HVAC upgrades, lift modernisation, and fit-out incentives. The distinction matters for accounting treatment: maintenance costs are expensed through the profit and loss account, while capital works are capitalised on the balance sheet.
Last updated on October 11, 2026
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