The aim of this study was to examine changes in the overall costs of an office when the efficiency of space use is increased. The variable in the examination was a space index, calculated as the floor area per employee. The quality of indoor climate was also a variable in the analysis. The overall cost analysis of a given case building showed that when space use is boosted significantly, measures must be taken to guarantee a sufficient quality of indoor climate. The study indicates that investment in the quality of indoor climate is cost-effective when the economic effect of indoor climate to health and productivity are taken into account in addition to the costs of investment, operation and maintenance. Insufficient ventilation without mechanical cooling may cause a substantial loss of productivity. The importance of good ventilation and air-conditioning increases with a more efficient use of space especially in conjunction with high value of work. (c) 2005 Elsevier Ltd. All rights reserved.