As a new member of the IPMS Standard Setting Committee, I attended my first committee meeting in early May in Frankfurt, and officially joined the other members to continue the hard work of the last 5 years. The committee members are very diverse, and when it came time to report on progress, we were all struck once again by the measurement variances between each country. These differences, while important, served to highlight the very reason that brought us together: we as an industry need to create a universal standard of reporting building measurement.
We live in an increasingly globalised world, where technology and unified processes have made it easier for investors to purchase property in multiple countries. What globalisation and technology have also shown are the huge differences in practices surrounding the purchase, management and sale of property, from country to country. One such practice is the way the area of properties is reported.
It is important for all sides involved in a property transaction to get their building measured by a professional measurement surveyor. Errors or omissions in measurement reports may cause all manner of issues, from unnecessary delays to disputes and additional expenses.
However, there is huge variation surrounding measurements of property, by which it is almost impossible to assess construction costs and values of assets. Depending on the property measurement employed, a property’s floor area can deviate in size by as much as 24%. Clearly, investors wouldn’t want to lose almost a quarter of their assets expected value, based on incorrect reporting.
Issues in deviation aren’t just constrained to office buildings, but to residential, industrial, retail, public service buildings, such as hospitals and schools, and others. In fact, there is no agreed standard to measure a number of these different building types. Clients often ask me to adopt the best approach to meet their needs.
At Hollis, we have offices across the UK, Ireland, Netherlands, Germany and Spain, and understand that the measurement practices in each country vary widely. Our involvement in recent projects in Germany, France, and the Netherlands, have served to remind us that the measurement of buildings in Europe varies widely and although buildings are measured to the local standard, there is no common language to translate between them.
The International Property Measurement Standard Coalition (IPMSC), which is made up of over 80 leading, international organisations, is working hard to provide a unilateral solution to this issue. It has produced guides to set an international standard of measurement for office, residential and industrial assets. A guide for retail assets is in the advanced stages and set to be approved soon. The coalition is also seeking to harmonise the standards into one document, which will be able to be used for other asset classes, such as; schools, hospitals, hotels and student accommodation – an area that has seen an influx in investment from REITs and other institutional investors.
Whilst this is a huge step forward in terms of bringing some formality to the way properties are measured globally, these new practices need to be adopted by all parties to ensure everyone is valuing assets in the same way. We are currently some way from adoption by all, and so consultants, asset managers and investors are missing out. We must continue to spread the word loud and clear that a single standard of measurement is there to be used, and can only benefit all in the long run.