Real Estate Sector Celebrates the Launch of New International Property Measurement Standard (IPMS) for Office Buildings
Real Estate Sector Celebrates the Launch of
New International Property Measurement Standard (IPMS)
for Office Buildings
November 24, 2014: A new standard that will bring transparency and consistency to global real estate markets has been launched today. 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.
In 2013 commercial property market transactions were estimated to be more than $1trillion worldwide according to Real Capital Analytics, with investors and corporate occupiers increasingly operating across international borders. Despite this, many of the standards used within the industry are local market specific, making consistency and comparability a significant challenge.
IPMS for Office Buildings will lead to increased transparency and consistency across real estate markets that will benefit the way property assets are managed and, ultimately, how financial decisions are made by investors, corporate occupiers, buyers and sellers.
Historically, property has been measured differently throughout the world. 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%.
These inconsistencies have led to confusion in markets, and even led businesses to develop their own costly processes for measuring and benchmarking property assets. Investors too, including pension funds, have had to factor in variation in quoted property size when making decisions about acquiring new property.
The work to create this new global measurement standard has been spearheaded by a Coalition of more than 50 professional organisations and has been produced following global consultation by a team of 18 independent industry experts. The new standard will define which areas are included when measuring a property and which are not.
The response from industry has been overwhelmingly supportive and governments too are expected to support the adoption of IPMS as means of promoting transparency and international best practice. 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. More than 100 businesses have already signalled their intention to request or use IPMS measurements within their organisations by signing up as Partners of the IPMS initiative.
|“This issue has challenged the entire property industry for a long time, with implications of trust, transparency and consistency for tenants, landlords and owners alike. Through the vision and collective efforts of the coalition and others, we now have IPMS, which will help bring transparency and consistency for all. As an owner, landlord and tenant; we will fully embrace IPMS across our global portfolio”
Scott McMillan Division Chief: Facilities, Real Estate and Capital Projects at International Monetary Fund (IMF)
“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.” Bill Davidson, Global Property Director, Vodafone
“Our involvement in this initiative supports our position in raising the benchmark for unifying surveying standards in Dubai. The efforts to unify surveying standards should benefit property owners and investors, as it will negate some of the issues and problems that can arise from differing standards used by real estate operators. It will support transparency and trust and will contribute to the convergence of global markets.” Sultan Butti Bin Mejren, Director General of the Dubai Land Department
“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.” Martin Bruehl, Head of Investment Management, International, Union Real Estate Investment
“This initiative is fully aligned with our desire to bring transparency and regularity to the global real estate market which can be afflicted by inconsistencies and confusion in terms of property measurement. We believe that IPMS for Office Buildings will help corporates better manage and benchmark their property assets across multinational portfolios and in turn, allow them to make better financial and business decisions. Implementation of these standards will be gradual but we hope that over time global corporate occupiers will be able to adopt these codes of measurement and use them to their advantage.” John Duckworth, Head of Occupier Services at JLL