by Brianna Crandall — December 8, 2014—A new industry standard that will bring transparency and consistency to global real estate markets was launched last week. The International Property Measurement Standard: 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. The new standard will define which areas are included when measuring a property and which are not.
The need for IPMS arose as property has historically been measured differently throughout the world, causing inconsistencies and confusion. The Royal Institution of Chartered Surveyors (RICS) offers the examples that in India, an office measurement may include offsite car parks; 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.
According to research by global property firm JLL, depending on the standard used, the area quoted in different markets for an equivalent building could vary by as much as 24 percent. 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 decisions about acquiring new property.
In 2013 commercial property market transactions were estimated to be more than $1 trillion worldwide, according to Real Capital Analytics. 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 and effectively manage property assets.
The work to create this global measurement standard was spearheaded by a coalition of some 55 professional organizations in the form of the International Property Measurement (IPMS) Coalition and was produced following global consultation by a team of 18 independent industry experts. The IPMS Coalition includes such groups as: ASTM International, Building Owners and Managers Association International (BOMA International), CoreNet Global, Institute of Real Estate Management (IREM), International Consortium of Real Estate Associations (ICREA), International Facility Management Association, (IFMA), International Monetary Fund (IMF) and Royal Institution of Chartered Surveyors (RICS).
The response from the industry has been overwhelmingly supportive, says the IPMS Coalition, and governments, too, are expected to support the adoption of IPMS as means of promoting transparency and international best practice. More than 100 businesses have already signaled their intention to request or use IPMS measurements within their organizations by signing up as Partners of the IPMS initiative, and 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.
