IPMS Launch Signals Landmark Moment for Global Real Estate Industry

HONG KONG, Nov. 25, 2014 /PRNewswire/ -- A new industry standard that will bring transparency and consistency to global real estate markets has been launched today (24 November 2014).  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 set to align the many dozens of existing standards, creating a common language for measurement around the world .

RICS (Royal Institution of Chartered Surveyors) was a founding member of the coalition which developed IPMS, alongside 55 other standard-setting bodies. Implemented by professionals and professional organisations throughout the world, the standard will ensure a single, coherent methodology.

The need for IPMS arose as property has historically been measured differently throughout the world, causing inconsistencies and confusion. In India, an office measurement may include offsite car parks while 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. Depending on the standard used the area quoted in different markets for an equivalent building could vary by as much as 24%.*

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 investment decisions.

In 2013 commercial property market transactions were estimated to be more than $1trillion worldwide**. 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. 

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 and more than 100 global businesses have signaled their intention to request or use IPMS measurements within their organisations by signing up as Partners of the initiative.

RICS will be producing its own guidance on how to use IPMS -- due out in early 2015. Meanwhile, the coalition will now turn its attention to developing an international property measurement standard for residential properties that is expected to be published in 2015.

* According to research by global property firm JLL

** According to Real Capital Analytics

"The implementation of IPMS will undoubtedly improve the transparency of commercial real estate for both owners and occupiers, which will elevate Asian markets in terms of international recognition and compliance. It will also help surveyors operating in foreign markets to compare different properties and report across multiple cities in a more consistent manner, thereby safeguarding their stakeholders interest," Nigel Smith, Chairman of RICS Hong Kong Commercial Property Professional Group Committee.

"As a property developer with a portfolio of property assets covering a variety of uses associated with the Club's business in Hong Kong and Mainland China, I fully support this initiative to develop an internationally unified IPMS for measuring real estate space. I am a strong believer that a common approach to space measurement is the basis for greater reliability of comparative and benchmarking data, reporting consistency and marketplace transparency. I am looking forward to the far-reaching benefits of this initiative that would enable more informed decision-making by owners, occupiers, investors in all sectors and greater market stability," Philip Chen, Head of Property Development Management, The Hong Kong Jockey Club.

"This is a huge step forward for the property industry and one which RICS is delighted to have been a part of since the very start. Chartered surveyors play a critical role in providing best practice advice across the property industry in more than 140 countries worldwide. IPMS will ensure that surveyors, their clients and the markets they work in receive consistent, transparent and comparable property measurement information. The work of the coalition will not stop here. Over the coming months and years IPMS will bring measurement consistency to residential, industrial and retail sectors. RICS will now work with chartered surveyors and the property industry to update our guidance, ensuring that it fully reflects the new IPMS standard," Sean Tompkins, Global CEO, RICS.

"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).

"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.

  Background Notes:

• The IPMS for Office Buildings standard is available to view online at: www.ipmsc.org.
• The IPMS Coalition was formed at a meeting hosted at the World Bank on 1-2 May 2013.
• IPMS for Office Buildings is the first in a series of international property measurement standards that will include IPMS for Residential Buildings, IPMS for Industrial Buildings and IPMS for Retail Buildings.
• All coalition organisations have committed to implementing the new standard through their own guidance for professional practitioners.
• RICS chartered surveyors will provide IPMS measurement services to clients and markets throughout the world.
• The following organisations make up the IPMS Coalition:

About RICS

Confidence through Professional Standards

RICS promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure. Our name promises the consistent delivery of standards -- bringing confidence to the markets we serve.

We accredit 118,000 professionals and any individual or firm registered with RICS is subject to our quality assurance. Their expertise covers property, asset valuation, real estate management; the development of infrastructure; and the management of natural resources, such as mining, farms and woodland. From environmental assessments and building controls to negotiating land rights in an emerging economy; if our members are involved the same professional standards and ethics apply.

We believe that standards underpin effective markets. With up to seventy per cent of the world's wealth bound up in land and real estate, our sector is vital to economic development, helping to support stable, sustainable investment and growth around the globe.

With offices covering the major political and financial centres of the world, our market presence means we are ideally placed to influence policy and embed professional standards. We work at a cross-governmental level, delivering international standards that will support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all.

We are proud of our reputation and work hard to protect it, so clients who work with an RICS professional can have confidence in the quality and ethics of the services they receive.

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About RICS Asia

RICS Asia supports a network of over 20,000 individual professionals across the Asia region with an objective to help develop the land, property and construction markets in these countries, by introducing professional standards, best practice education and training. We promote RICS and our members as the natural advisors on all property matters. We also ensure that services and career development opportunities are provided to members.

RICS Asia region serves local member associations locating in Brunei, Japan, Malaysia, Singapore, Thailand, The People's Republic of China, Hong Kong SAR, Taiwan and South Korea. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Kiribati, Laos PDR, Macao SAR, Mongolia, Nepal, North Korea, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: www.ricsasia.org.

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