How has the global recession influenced the role of RICS? How have you helped your members go through these difficult times?
The global financial crisis and resultant recessions have highlighted the role professional bodies must play in the creation, implementation and regulation of International Standards. RICS has responded to the economic climate by collaborating with other world and regional professional bodies and associations in order to increase transparency and regulation within the global markets and to gain universal acceptance of International Valuation Standards (IVS).
In addition, RICS is in the process of working as part of an industry-wide coalition to establish International Property Measurement (IPMS) and International Ethical Standards. This initiative involves over 20 professional bodies from across the world and is an excellent example of collaboration in the public interest.
RICS has also done much to assist its members in these difficult times through providing further guidance and assistance where necessary. However I would point out that RICS is not a trade association protecting its member’s interests, but a public interest body. Under the Royal Charter the primary goal of RICS is to protect the public interest. In this respect RICS has pioneered regulation for all its valuers, who are registered and monitored to ensure all their valuations are in line with International Valuation Standards.
What are some of the latest standards you are working on or that you have adopted recently?
RICS is committed to the advancement of the profession for the public good. Standards are at the very core of our existence. Over the last two years, we have embarked on an ambitious program to develop standards in partnership with other professional institutions, better reflecting the international and interconnected world that we and our members operate in.
One of the biggest challenges facing our profession today is the multitude of property measurement practices that are used around the world. From one market to the next, the way a property is measured – that is, what is included in a space measurement – varies dramatically. Some measurement practices include ‘shared/common space’; some stipulate measurements from the center of a wall; others from the inside. As a result, research undertaken by Jones Lang LaSalle shows that, depending on the method used, a property’s size could deviate by as much as 24%!
RICS is working with 21 other organizations, including the International Monetary Fund and BOMA International to develop and implement a single standard method for measuring property. The impact will be enormous and will lead to huge advances in the way property markets currently operate. Among other things, it will lead to more transparency, better market information for investors and occupiers and more robust financial reporting.
Following the success of this collaborative approach in developing a genuinely international property measurement standard, RICS will shortly look to initiate a similar project to develop a shared international ethical standard for our profession. Expo Real provides us with a great opportunity to begin having discussions with other organizations interested in joining an ethical standards coalition later this year.
Of course, one of the areas that RICS has been highly active in over recent years is establishing International Valuation Standards. In November, we will be launching the next, fully IVS-compliant edition of the RICS Valuation Standards (the Red Book), working with other organizations that adopt IVS to highlight the importance of shared valuation standards.
How does RICS influence EU policies for the real estate sector?
RICS has a dedicated EU Affairs team in our European HQ in Brussels. They liaise with the EU institutions, and cooperate with other relevant industry and professional bodies in the property sector. RICS is a member of the European Real Estate Forum that aims to educate and influence the EU institutions on the importance of real estate for the real economy. Other members of this Forum include INREV, EPRA and national property organizations from various countries, including Germany, France, the UK and The Netherlands.
RICS recently had some notable success as, for the first time ever, RICS Valuation Standards are mentioned in an EU Directive. The forthcoming Directive regulating Residential Mortgage Credit Agreements asks Member States to come up with appropriate valuation standards, and RICS and IVS are amongst those mentioned as best practice examples.
What are the trends that will shape the future of the industry?
The real estate profession is a fast-paced one, changing and adapting constantly to the world around us. From demographic trends impacting housing supply to multidisciplinary working and new technologies such as Building Information Modelling (BIM), our profession is constantly evolving. RICS and its members have a key role to play in shaping and underpinning the future of the real estate and built environment sectors.
To support us in this endeavor we will shortly be rolling out a global project, starting at Expo Real, aimed at consulting practitioners on what they think the real estate and built environment profession will look like in 2030. By gathering the thoughts of those working in and alongside the sector, we can start to plan and initiate actions that will enable us to maximize future opportunities and mitigate risks. This is a very exciting piece of work and one that our members and the wider industry will hopefully benefit from.