International Property Measurement Standards – Reducing risk and uncertainty

Richard WarburtonRichard WarburtonChairman of the Property and Construction Group, EC Harris, writes.

As property portfolios become increasingly globalised, many organisations are looking at a Programme Management Office (PMO) approach to help optimise their CAPEX and OPEX spend, guarantee greater levels of consistency around the final product delivered, and drive increased speed to market.

Whilst the theory behind this approach is sound, it’s not always so straight-forward in practice. One of the biggest challenges to overcome when working on international portfolios is the lack of consistency around how space is measured. International standards for property management do not yet exist, with each market often adopting their own unique approach.

Ambiguities around space make it difficult for global investors and occupiers to make informed business decisions. This is a real challenge for them particularly now when budgets are being reduced, property teams are shrinking and the profit and loss is under greater scrutiny than ever before.

On that basis we should all welcome the recent formation of the International Property Measurement Standards Coalition (IPMSC). This group has been set up by 20 globally recognized organizations including RICS, APREA and CoreNet Global, to help resolve some of the disparities that exist around how space is measured.

Having an agreed set of principle-based and internationally applicable measurement standards will be crucial when it comes to delivering multi-market or Pan-Asia programmes. They will provide greater transparency around costs and to build both public trust and investor confidence. They will also help to ensure there is greater accuracy, consistency and efficiency in how information is reported in financial statements, something which will be of increasing importance moving forward.

Standards form the building blocks of a global economy and by creating a level playing field around how property is measured and valued, there’s no doubt in my mind that the industry is taking a really positive step forward.