A new industry standard that will bring transparency and consistency to global real estate markets has been launched. The International Property Measurement Standard for Offices (IPMS for Office Buildings) is the result of a global effort to create a uniform method for measuring property and is set to replace dozens of existing standards currently in use around the world.
RICS was a founding member of the coalition which developed IPMS, alongside 55 other standard-setting bodies. Implemented by professionals and professional organizations throughout the world, the standard will ensure a single, coherent methodology.
The need for IPMS arose as property has historically been measured differently throughout the world, causing inconsistencies and confusion. In India, an office measurement may include offsite car parks while in Spain it may include outdoor leisure facilities. In some parts of the Middle East hypothetical floors may be included and in other parts of the world local standards require measurements of air-conditioned areas and not floor space. Depending on the standard used the area quoted in different markets for an equivalent building could vary by as much as 24%.*
As a result, businesses have had to develop their own costly processes for measuring and benchmarking property assets. Investors too, including pension funds, have had to factor in risk associated with the variation in quoted property size when making investment decisions.
In 2013 commercial property market transactions were estimated to be more than $1trillion worldwide**. As investors and corporate occupiers increasingly operate across international borders, IPMS will provide the consistent and transparent measurement data needed to make sound business decisions.
The Dubai Government has already announced plans to make IPMS mandatory in response to a growing international investor base moving into Dubai’s commercial property sector and more than 100 global businesses have signaled their intention to request or use IPMS measurements within their organizations by signing up as Partners of the initiative.
RICS will be producing its own guidance on how to use IPMS – due out in early 2015. Meanwhile, the coalition will now turn its attention to developing an international property measurement standard for residential properties that is expected to be published in 2015.