1. Purpose
You need to pick the right air conditioning system early in design. Get it wrong, and you waste floor area on oversized plant rooms, blow the budget on ductwork that does not fit, or lock a tenant into energy bills that never drop.
This memo breaks down the four main system types you will see on commercial projects in Australia. It covers how each one works, where it fits, and what drives the choice between them. The goal is to give you enough technical grounding to have a productive conversation with your mechanical engineer at concept stage - before the ceiling void is set and the riser is sized.
2. The Four System Types
2.1 Split and Multi-Split DX Systems
A split system moves heat from inside to outside using refrigerant. One outdoor condenser connects to one indoor unit. A multi-split connects one outdoor unit to two to five indoor units.
How it works: Refrigerant absorbs heat at the indoor coil, travels through copper pipes to the outdoor unit, dumps the heat, and cycles back. The system cools the air directly - no water involved. This is what “direct expansion” (DX) means.
Best for: Tenancies under 500 m². Think small offices, retail shops, server rooms, and fit-out additions where the base building system does not reach.
Watch out: Every indoor unit needs an outdoor unit (or shares one in multi-split). Ten tenancies means ten outdoor units on the roof or wall. Plan condenser locations and screen them from the street. Refrigerant piping runs max out around 30 m for splits, which limits plant placement.
2.2 Packaged and Rooftop DX Systems
A packaged unit puts the compressor, condenser, evaporator, and fan in one box. Rooftop units (RTUs) sit on the roof and push conditioned air down through ductwork.
How it works: Outside air enters the unit, mixes with return air, passes over the DX cooling coil, and gets pushed through supply ducts into the space. The condenser rejects heat directly to outdoor air from the same unit. No refrigerant piping runs through the building.
Best for: Single-storey retail, warehouses, supermarkets, and big-box commercial buildings. Any project where you have roof area but limited ceiling void and no plant room.
Watch out: Ductwork from roof to floor takes space. Structural engineers need to know the unit weight early - a 150 kW RTU weighs around 800 kg. Noise from rooftop units can affect neighbours, so check acoustic setback requirements under your local council's noise policy.
2.3 VRF / VRV Systems
Variable Refrigerant Flow (VRF) systems connect one large outdoor unit to many indoor units - up to 64 per outdoor unit. Each indoor unit controls its own temperature independently. “VRV” is Daikin's brand name for the same technology.
How it works: The outdoor unit varies compressor speed and refrigerant flow to match the exact load in each zone. If the boardroom needs 8 kW of cooling but the server room only needs 3 kW, the system delivers exactly that. Heat recovery models move heat from zones that need cooling to zones that need heating at the same time - common in Australian winter mornings when the sunny side overheats while the south side stays cold.
Best for: Multi-storey offices from 500 m² to 10,000 m². Hotels. Mixed-use buildings with tenancies that have different operating hours. Retrofit projects where duct space is tight, because VRF uses small-diameter copper piping (12 mm to 28 mm) instead of bulky ductwork.
Watch out: Refrigerant piping can run up to 200 m from outdoor to furthest indoor unit (check manufacturer limits - Mitsubishi City Multi allows 1,000 m total piping length per system). A 60 kW VRF system holds around 10–12 kg of R-410A factory charge, plus additional refrigerant for long piping runs. All refrigerant work in Australia requires an ARCTick-licensed technician, and the 2025 Refrigerant Handling Code of Practice sets strict leak detection and recovery requirements. The shift to R-32 and lower-GWP refrigerants is underway but not universal yet.
A field study measured VRF COP of 4.2 at full load and 3.9 at 75% load. VRF systems perform best at 40–60% capacity, which is where commercial buildings spend most of their operating hours.
2.4 Chilled Water Systems
A central chiller makes cold water (6–7°C supply, 12–13°C return). Pumps push that water through insulated pipes to fan coil units (FCUs) or air handling units (AHUs) throughout the building.
How it works: The chiller uses a refrigeration cycle to cool water. That water travels through pipes to terminal units in each zone. Fan coils blow room air across the chilled water coil and deliver cooled air to the space. The chiller rejects heat through a cooling tower on the roof (water-cooled) or a condenser fan (air-cooled).
Best for: Buildings over 10,000 m². Hospitals. Shopping centres. University campuses. Any project where you need to move cooling over long distances - water pipes carry energy far more efficiently than refrigerant lines.
Watch out: You need a dedicated plant room. A 500 kW chilled water plant needs roughly 40–60 m² of floor area for chillers, pumps, and switchboards, plus roof space for cooling towers. Water-cooled systems need a water treatment program and Legionella risk management plan - this is a legal requirement in every Australian state.
ASHRAE 90.1 sets a minimum of 5.2 COP for centrifugal chillers above 1,055 kW. This is the most efficient option at scale, which is why every hospital and large commercial tower uses it.
3. Decision Framework: Matching System to Building
The table below gives you a starting point. Your mechanical engineer will refine it based on load calculations per AIRAH DA09, but this gets the conversation started at the right scale.
| Building Size | System Type | Why |
|---|---|---|
| Under 500 m² | Split or multi-split DX | Low cost. Simple. Fast to install. |
| 500 – 2,000 m² | VRF or packaged DX | VRF gives zone control. Packaged suits single-storey retail. |
| 2,000 – 10,000 m² | VRF or small chilled water | VRF for multi-tenant flexibility. Chilled water if the building has a plant room and long design life. |
| Over 10,000 m² | Chilled water central plant | Best efficiency at scale. Long pipe runs handled easily. Redundancy with N+1 chillers. |
| Campus or precinct | Chilled water with thermal storage | Share infrastructure across buildings. Add ice or chilled water storage to shift peak demand. |
Three questions to ask at concept stage:
- What floor area does the building serve? This sets the capacity range and narrows the system type.
- Where does the plant go? If you have no plant room and limited roof area, VRF or splits are your options. If you can give up 40–60 m² on the ground floor or basement, chilled water becomes viable.
- What are the tenancy patterns? A single-tenant office with 8 am to 6 pm hours is simple. A mixed-use building with a gym, restaurant, and offices running at different times needs independent zone control - and that points to VRF or chilled water with dedicated FCUs.
4. Efficiency and Running Costs
Running cost depends on system COP and the electricity tariff. Large commercial customers in Australia typically pay $0.15 to $0.35 per kWh depending on state, tariff structure, and negotiated contract. Here is what that means in practice.
For a 2,000 m² office with a 200 kW cooling load running 2,000 equivalent full-load hours per year:
| System | COP | Annual Electricity (MWh) | Annual Cost at $0.25/kWh |
|---|---|---|---|
| Split DX | 3.5 | 114 | $28,600 |
| VRF | 4.0 | 100 | $25,000 |
| Chilled water (air-cooled) | 3.2 | 125 | $31,300 |
| Chilled water (water-cooled) | 6.0 | 67 | $16,700 |
The water-cooled chiller wins on running cost, but it needs a cooling tower and plant room. For a 2,000 m² building, the capital cost of that infrastructure rarely pays back. VRF hits the sweet spot at this scale - 12% less energy than splits, no cooling tower, and minimal plant room space.
At 10,000 m² and above, the math flips. Water-cooled chillers save $40,000 or more per year in electricity compared to VRF, and the plant room cost spreads across a larger building area.
5. What Architects Need to Coordinate
Each system type creates different demands on the building design. Get these into the brief early.
Ceiling Void Depth
- Splits and VRF fan coils: 250–350 mm clear above ceiling tile
- Ducted systems (packaged, AHU): 400–600 mm for ductwork
- A 3,600 mm floor-to-floor with 2,700 mm finished ceiling leaves 900 mm - enough for either, but account for structure, services crossings, and fire sprinklers
Outdoor Unit Locations
- Splits: one per tenancy, wall-mounted or roof. Screen from public view.
- VRF: fewer but larger units. 60 kW unit: ~1,600 x 900 x 1,700 mm. Allow 500 mm clearance on discharge side.
- Chillers: air-cooled need ~6 x 2.5 m roof area per 500 kW. Water-cooled sit in plant room but need roof-mounted cooling towers.
Risers and Pipe Routes
- Splits: 65 x 80 mm penetration per pair of refrigerant pipes and drain
- VRF: one riser per building, 300 x 300 mm minimum for headers and branches
- Chilled water: larger risers (150–300 mm dia. insulated pipes) but more capacity per riser
Acoustic Considerations
- RTUs: 65–75 dBA at 1 m. Keep away from noise-sensitive neighbours.
- VRF outdoor units: 55–62 dBA at 1 m. Quieter but still need setback.
- Cooling towers: 60–70 dBA. Often the loudest roof element. Acoustic louvres may be mandatory.
Electrical Supply
- 500 kW chilled water plant draws 120–150 kW of electricity. Main switchboard needs capacity.
- VRF outdoor units need three-phase power. A 60 kW unit draws about 20 kW.
6. Summary
Pick the system that matches the building's size, complexity, and lifespan. Splits work for small tenancies. VRF handles mid-rise commercial buildings with flexible zoning. Chilled water dominates large buildings and campuses where efficiency at scale and equipment longevity justify the plant room.
Start the conversation with your mechanical engineer at concept stage. Share the floor area, tenancy mix, ceiling void depth, and available plant room area. That is enough information for them to recommend a system type, estimate the plant space, and flag any coordination issues before you lock in the floor-to-floor height.
Do not leave the system selection to detailed design. By then, the building form is set, and a system that does not fit the architecture costs everyone time and money to redesign.
This memo provides general guidance for concept-stage decision-making. Detailed system selection requires load calculations per AIRAH DA09, compliance checks against NCC Section J energy efficiency provisions, and coordination with the full building services team.