RICS
RICS - IPMS Frankfurt
RICS Economist Tarrant Parsons commented: "Feedback from across many parts of Europe continues to signal that market activity retains solid momentum, even if growth is a little more modest compared to recent years in some cases."
RICS members from around the world met the weekend before Thanksgiving in Frankfurt to help launch the new International Property Measurement Standard (IPMS), a new measurement standard for office property which will replace dozens of existing standards across the world, and is designed to finally bring transparency and consistency to the real estate industry.
55 international standard-setting bodies, including associations such as RICS (as a founding member of the new initiative), INREV, CoreNet Global, ANREV and the IMF, have agreed to implement a uniting standard to avoid inconsistencies in measurements, which can vary by up 24% for an equivalent building. Examples given at the presentation in Frankfurt, attended by REFIRE, were the inclusion of car park space in India, outdoor leisure facilities in Spain or hypothetical floors in the Middle East. In too many markets investors, landlords and tenants had to develop their own processes for measuring and benchmarking assets.
Moderating the accompanying panel discussion at the Frankfurt launch was Martin Brühl, president-elect of the RICS governing council worldwide and in his day-job the head of international investment management at Hamburg-based Union Investment Real Estate. Brühl commented that “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 problem; removing risk and ensuring property investors are armed with reliable and transparent information.”
Panel member Marc Grief, Professor at the University of Applied Sciences in Mainz, said that the Americans are the most generous in their measurement of square meterage, likely to produce 3-5% more measured area than by using German standards, for example. Comparisons with the UK, India, Japan or Hong Kong would produce double-digit variations. Supporting pillars in high-rise buildings in the US, are considered part of the area of office space, although the space cannot be used, gave Grief as an example. “In the UK and many Asian countries, by contrast, toilets, kitchen niches and storage areas are not included as a rule in office space, because no office worker has desk space there”, he added.
Tanja Severin, head of property management at Siemens with responsibility for 15m sqm of office and industrial space worldwide, cited several examples of the confusion her team faces when dealing with the myriad standards pertaining worldwide, particularly in comparing claims for space needs from different subsidiaries. She welcomed the new standard, but warned that it would lead to confusion in the short term as all existing records would need to be amended. She also called for the creation of a new industrial standard, not just for offices, so that companies such as Siemens can evaluate all their property holdings.
As investors and corporates increasingly operate across international borders, the IPMS will provide a consistent and transparent measurement for business decisions, said RICS. Over 100 global businesses have already signalled their intention to request or use the standard by signing up as partners. “The work of the coalition will not stop here,” said RICS Global CEO Sean Tompkins. “Over the coming months and years IPMS will bring measurement consistency to residential, industrial and retail sectors.” The residential standard is expected to be published in 2015.
