This article presents the computational simulation process and the operation algorithms of the VAV and VRV systems, for indoor space conditioning, with extensive physical cooling and heat recovery. Through the introduction of appropriate operation algorithms, the article aims to highlight the high energy saving potential on indoor space conditioning, by exploiting physical cooling and heat recovery processes. The proposed algorithms are evaluated with a case study for a hydro power plant building located in the area of Lugano, Switzerland, with significant cooling needs for the whole year, due to high internal heat gains from indoor electrical equipment. This fact enables physical cooling during winter, for the cooling load coverage, and heat recovery, for the concurrent heating load coverage in different thermal zones of the building. Analytical operation algorithms are developed for a VAV and a VRV system. Both algorithms are computationally simulated. With the VAV system, 86.1% and 63.7% of the annual cooling and heating demand, respectively are covered by physical cooling and heat recovery. With the VRV system, 58.5% of the annual heating demand is covered by heat recovery. The set-up cost of the VAV system is almost twice higher than the set-up cost of the VRV system.