A new standard in measuring office space will bring transparency and consistency to global real estate markets, supporters said.
The International Property Measurement Standard for Offices (IPMS for Office Buildings) was launched yesterday (Tuesday) following a global effort to create a uniform method for measuring property.
The IPMS will replace dozens of existing standards currently in use around the world.
According to research by global property firm JLL, depending on the standard used the area quoted in different markets for an equivalent building could vary by as much as 24 percent.
These inconsistencies have led to confusion in markets, and even led businesses to develop their own costly processes for measuring and benchmarking property assets.
Investors too, including pension funds, have had to factor in variation in quoted property size when making decisions about acquiring new property.
“Globalization is not a coming trend – it is here and it is a fact of life,” said Lori Burger, CPM, president of IREM, which is a member of the coalition that led the development of the new standard.
“There continues to be a steady increase in cross-border investments and in international capital flows. In what has become a global real estate market, the need for transparency, for a common language, and for international standards becomes paramount.
“The launch of these International Property Measurement Standards for Office Buildings is a huge step forward.”
In 2013 commercial property market transactions were estimated to be more than $1 trillion worldwide according to Real Capital Analytics, with investors and corporate occupiers increasingly operating across international borders.
Despite this, many of the standards used within the industry are local market specific, making consistency and comparability a significant challenge.
IPMS for Office Buildings will lead to increased transparency and consistency across real estate markets that will benefit the way property assets are managed and, ultimately, how financial decisions are made by investors, corporate occupiers, buyers and sellers.
“With investors, corporate occupiers and third-party management firms expanding their businesses globally, there is an increasing need for consistency in the methodology to measure and compare real property,” said BOMA International Chair-Elect Kent Gibson, CPM, BOMA Fellow, president of Capstone Property Management, LC, and member of the IPMSC Standard Setting Committee.
“The IPMS for Office Buildings allows the measurement of office buildings to be consistently applied anywhere in the world, creating cross-border transparency and the ability to accurately benchmark operations.”