WASHINGTON, May 1, 2013 (GLOBE NEWSWIRE) -- Some of the world's leading property institutions, including the Royal Institution of Chartered Surveyors (RICS), will come together at the World Bank in Washington D.C. today to address the creation of international property measurement standards. The meeting marks the formation of the first International Property Measurement Standards Coalition or IPMSC.
Currently, the way property assets are measured vary wildly from country to country. With so many different methods in place, it makes it difficult for global investors to compare space measurements accurately. This confusion can affect property values, lead to errors in financial reporting and, consequentially, undermine market confidence and economic stability.
The aim of the IPMSC is to resolve disparities by developing and implementing International Property Measurement Standards, a set of measurement standards that are principle-based and internationally applicable, and would be adopted by all nations across the globe. This proposed implementation of a universal method of measuring property assets will tackle the problem of low investor confidence in property assets, its negative impact on financial markets, and ultimately global economic instability.
Convened by RICS, this initial meeting of the International Property Measurement Standards Coalition (IPMSC) is the first step to delivering this consistency which will provide:
- Greater global financial stability
- More accurate and consistent financial reporting
- Stronger investor confidence
- Greater transparency of data
- Reduced risk of fraud
An example of current inconsistency is the way in which floor space is calculated. For example, in Spain, floor areas have been measured to include outdoor swimming pools; in parts of the Middle East they can include the hypothetical maximum number of floors that could be built on the existing foundations; and in Australia, measurements have included outdoor parking spaces, even when they are not physically adjoined to the property itself.
The establishment of International Property Measurement Standards would ensure global consistency, leading to fewer instances of fraud, a more transparent market, greater public trust and increased economic stability.
Ken Creighton, RICS Director of Professional Standards:
"This is a groundbreaking initiative which has the potential to deliver huge benefits, both to real estate markets and to the economies and the populations they support around the world, by creating a level playing field for the way property is measured, valued and ultimately reported in financial statements."
Julian Lyon FRICS, Manager, European Real Estate, General Motors:
"Working with international portfolios inevitably brings real difficulties of comparison when every market has at least one different way of measuring space. It is bad enough that we do not all use the same conversion factor between square feet and square meters! I, and my peers from other major global businesses, either have to convert all space into our own individual basis of common measurement or suffer the inadequacy of comparing apples and pears - which negatively impacts on a company's ability to make sound business decisions. I welcome an initiative that will bring portfolio-wide, global consistency to space measurement and which, for the first time, will allow the industry to benchmark good space-use practice from wherever in the world it may be."
Steve Williams FRICS, Executive MD, Real Capital Analytics, New York:
"The accurate recording of land, building and floor area measurements is fundamental to market transparency. Transparency in turn is a catalyst to the global capital flows that underpin the provision of adequate shelter, food and clothing to the world's growing urban populations."
"With the exception of language, it would not be an exaggeration to characterize global measurement protocols as the most urgent outstanding issue in the pursuit of global market transparency and performance comparability."
Ramsey Trados FRICS, Westfields Consultoria Empresarial Ltda, São Paulo, Brazil:
"The inconsistencies in the commercial real estate measurement standards in Brazil have been responsible for confusion in the mind of space users, developers and investors. The discrepancies as to how space is measured can only further the distortions in values and overall definition of space. There is no doubt that unless there is an internationally recognized measurement standard, there can be no real internationally homogeneous standard of value".
The organisations involved in the IPMS are:
American Society of Farm Managers and Rural Appraisers (ASFMRA) – North America
Appraisal Foundation – North America
Appraisal Institute – North America
Asia Pacific Real Estate Association (APREA) – Asia
Associacão Brasileira de Normas Técnicas (ABNT) – Brazil
Australian Property Institute – Australia
Building Owners and Managers Association International (BOMA) – Global
China Institute of Real Estate Appraisers and Agents (CIREA) – China
CLGE – Europe
CREDAI – India
Commonwealth Association of Surveying and Land Economy (CASLE) – Commonwealth nations
CoreNet – Global
Counselors of Real Estate (CRE) – North America
FIABCI – Global
Global FM – Global
International Consortium of Real Estate Associations (ICREA) – Global
International Facility Management Association (IFMA) – Global
International Federation of Surveyors (FIG) – Global
International Monetary Fund (IMF) – Global
International Valuation Standards Council (IVSC) – Global
Royal Institution of Chartered Surveyors (RICS) – Global
About RICS
RICS is the world's leading qualification when it comes to professional standards in land, property and construction.
In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.
Over 100 000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.
RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.
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