Industry Groups Unveil New Space Measurement Standard
- Nov 26, 2014
By Gail Kalinoski, Contributing Editor
A new international standard for measuring space in office buildings will lead to increased transparency and consistency in global commercial real estate markets, according to a coalition of more than 50 industry stakeholders who created the uniform method that will be the template for similar standards in residential, retail and industrial properties.
The International Property Measurement Standard for Offices will replace dozens of existing standards currently in use around the world. The coalition notes the new standard will benefit the way property assets are managed and how financial decisions are made by investors, corporate occupiers, buyers and sellers. The new standard defines which areas are included when measuring a property and which are not.
“There were different ways of measuring space from the window, from the wall,” Nancye Kirk, chief strategy officer and vice president of global services at the Institute of Real Estate Management, told Commercial Property Executive. “What do you do about common areas?”
For example, the standard states patios and decks at ground level, external car parking, equipment yards, cooling equipment, refuse areas and other ground-level areas that are not fully enclosed should not be included in the sum of the building’s area.
“This is a first step towards speaking with a common language and a common understanding of how we define space for the building environment,” Kirk said.
With different standards being used throughout the world, research from global property firm JLL found the area quoted in different markets could vary by as much as 24 percent. More than $1 trillion worldwide was spent in 2013 on commercial property market transactions, making the need to create an international standard increasingly more important, according to IREM and Building Owners and Managers Association International, which is also a member of the coalition.
“Globalization is not a coming trend – it is here and it is a fact of life,” Lori Burger, IREM president, said in a news release. “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.”
Chicago-based IREM and BOMA International, headquartered in Washington, D.C., were among the organizations that make up the IPMS Coalition, which was formed following a meeting at the World Bank in 2013.
“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,” BOMA International Chair-Elect Kent Gibson said in a release from his organization.
Gibson, a member of the IPMSC Standard Setting Committee, said the new standard will create cross-border transparency and the ability to accurately benchmark operations.
Kirk said more than 100 companies have been eagerly awaiting the release of the standard from the committee, including building managers, appraisers, architects, facilities managers, occupiers, and investors. Multinational companies in particular were “looking for a way to be more transparent across all operations,” she said.
The coalition is also engaging governments to adopt the measurement standard. The government of Dubai has already announced plans to make IMPS mandatory because of the growing international investment in Dubai’s commercial property sector, according to IREM and BOMA International.