Sounds like a trick question. Either a building is 10,000 sq metres or it is not – surely? Despite the apparent riddle there’s a very important point here which has major implications for the property profession, clients and the wider stakeholders in our built environment.
When we measure a building, it is for a purpose – for investment or occupation, etc. Codes of measurement ensure that professionals, wherever they practice, are clear about what’s included in that measurement and what’s not. The problem is that the property sector does not use the same code.
There are many different regional and global standards. However, because increasingly clients have international property needs, they’re suffering from a professional inconsistency. Research by Jones Lang LaSalle suggests that, depending on the measurement method used, the floor area of a building can deviate by as much as 24%. Imagine the impact this could have on the ownership, use and management of property portfolios which span multiple markets.
This problem isn’t just about data and methodological consistency, it‘s also about professional ethics and a need to improve transparency in the most fundamental aspect of our profession: measurement.
Working with international portfolios inevitably brings real difficulties of comparison when every market has at least one different way of measuring space. I, and my peers from other major global businesses, either have to convert all space into our own individual basis of common measurement or suffer the inadequacy of comparing apples and pears – which negatively impacts on a company’s ability to make sound business decisions.
Julian Lyon, Manager, European Real Estate, General Motors
A solution is on its way
In May 2013 a group of organisations from around the world – each with their own measurement code – assembled for a meeting at the World Bank in Washington. On the table was a proposal to create a coalition which could develop a truly international standard for property measurement; a standard which all organisations and their members could adopt and which would unify practices around the world.
Since then, the International Property Measurement Standard Coalition (IPMSC) has grown to include 35 professional and not-for-profit organisations. In September 2013, the Dubai Government became the first national government to state their intention to adopt the new standard when it publishes in June 2014.
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
An independent committee of 19 experts from 11 different countries was appointed by the coalition with the task of writing the new standard, which is currently out for consultation online until 04 April 2014.
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
Implementation the key
Creating an international standard is one thing but if it is to have a positive impact in the long run then it is implementation that counts. If it is not adopted widely then it runs the risk of becoming just another standard, exacerbating the current problem.
This is where the value of a collaborative approach really comes to the fore. The hope is that with coalition organisations signed up to implement the standard amongst their own memberships, there is a real chance that by this time next year, professionals all over the world will be measuring property along the same lines.
The accurate recording of land, building and floor area measurements is fundamental to market transparency. With the exception of language, it would not be an exaggeration to characterize global measurement protocols as the most urgent outstanding issue in the pursuit of global market transparency and performance comparability.
Steve Williams, Executive Managing Director, Real Capital Analytics, New York.
Our investment portfolio covers real estate from around the world. The many different ways of measuring space in markets may result in a lack of transparency and the distortion of true values. We would welcome a set of globally consistent and recognized property measurement standards. This common benchmark will help create market transparency and thus has the potential to facilitate global capital flow.
John Saunders, Head of Asian Real Estate, BlackRock
IPMS for offices is due to launch in June 2014. After that, the Coalition will turn their collective attention to IPMS for residential property and then IPMS for retail property in 2015.