The International Property Measurement Standards Coalition (IPMSC) has launched a public consultation on the International Property Measurement Standard (IPMS) for office buildings.
The three month consultation, closing on 04 April 2014, is calling for real estate (office) sector practitioners and stakeholders to contribute to the new international standard.
The new standard, produced by the IPMSC Standards Setting Committee, is the first of its kind and will provide a common language for measuring offices across international markets, benefiting real estate practitioners including investors, lenders, agents, valuers and occupiers.
The international standard will ensure that property assets are measured in a consistent way, creating a more transparent marketplace, greater public trust, consistency in the reporting of property size, stronger investor confidence, and increased market stability.
At present, the way property assets - such as homes, office buildings or shopping centres - are measured varies dramatically from one market to the next. With so many different methods of measurement in use, it makes it difficult for global investors, occupiers and tenants to accurately compare space. Research by global property firm Jones Lang LaSalle suggests that, depending on the method used, a property's floor area measurement can deviate by as much as 24%.
IPMS will be adopted by all 28 coalition organizations with firms around the world already lined up to implement IPMS from June 2014. The Dubai Government are the first government to commit to its adoption, which will underpin valuations of commercial property and financial reporting through IVS* and IFRS**. The new standard is considered one of the most significant developments in the real estate profession in recent history and will go beyond office measurement standardization to include other property types, such as residential, in the coming months.
Strengthening public accountability of the IPMSC, the coalition can now announce the appointment of a Board of Trustees. Members from each of the 28 organisations are represented on the board, chaired by Ken Creighton (RICS), with Vice Chair Lisa Prats (BOMA International) and Secretary General, Jean-Yves Pirlot (CLGE).
The coalition also confirms new IPMS members joining the coalition. Property Council of New Zealand (PCNZ); Asian Non-listed Real Estate Vehicles (ANREV), Assoimmobiliare, National Society of Professional Surveyors (NSPS) and Japan Association of Real Estate Agents (JAREA) have committed to the standards programme.
Ken Creighton, Chair of the IPMSC Board of Trustees and RICS Director of Professional Standards: Less than a year after the coalition met for the first time at the World Bank in Washington we now have an international standard. This standard will undoubtedly have a profound and lasting benefit for the global real estate industry, financial markets and society as a whole, ensuring transparency and consistency are at the very heart of this global industry.
Sachin Sandhir, Managing Director, RICS South Asia: Commercial real estate involves high ticket size transactions. The economic problems in the past have affected the growth of commercial markets around the world. Moreover, the ambiguity within measurement practices across the sector often leads to inconsistent values. The standards thus framed after due consultation will not only help in bringing consistency within the market but will also create a more transparent marketplace and increase stability. In the long term these standards will instill greater investor confidence and revive sentiment in the commercial real estate.
Billy Davidson, Vodafone Global Property Director: Vodafone occupies space for a wide range of uses all around the world. Like many other corporates we have had to develop our own means of benchmarking these property assets. I am certain that IPMS will save corporate occupiers time, money and effort across their property portfolios, and will enable us to compare space between companies far more easily than today.
Martin Bruehl, Union Investment, Head of International Investment Management:The usable space within a building is a vital metric in understanding the valuation and thus investment potential of a property. Investors currently suffer from having to make decisions based on information which is inconsistent from one market to the next. IPMS will address this existing problem; removing risk and ensuring property investors are armed with reliable and transparent information.
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