IPMS to address inconsistent global property data

Anomalies can have a huge impact on Financial Reporting

15 December 2015

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The World Bank estimates that 70% of global wealth is in property, but these valuations are based on inconsistent measurement data. These anomalies have made it very difficult to compare like-to-like and can lead to inaccuracies and poor measurement. The lack of transparency has also made it difficult to compare cross-border transactions which can have a huge impact on Financial Reporting.

The new International Property Measurement Standard (IPMS) for office buildings will standardise property measurement for offices across the globe when it comes into force on 1 January 2016. From that date all RICS professionals must comply with the new standards, which will provide consistency in the way in which office property is measured throughout the world. The RICS Property Measurement will incorporate IPMS in its global Professional Statement.

Tim Lawley, Associate with Cooke & Arkwright’s Business Space agency said, “All the firm’s surveyors have been given in-house training to understand the requirements of the new standards. Global variations have been so pronounced that there could be differences of up to 25% in measured floor areas, depending on the standard in a particular region. In Hong Kong for example, the office area measurement might include lifts, stairs, columns and toilets, while in the Middle East, non-existing floors could be included if they were supportable by existing foundations.”

The IPMS will provide increased transparency of property data, a consistent language for measurement worldwide, reduction of risk facilitating international trade in property, easier property portfolio benchmarking and greater credibility for valuation professionals worldwide.

IPMS will be rolled out to Residential, Industrial and Retail, although RICS members have been strongly advised to follow the standards as best practice.

Mansford has expanded its investment portfolio over the last few years. Over this time Andrew West has provided us with a full rating valuation service which has involved giving a view on liabilities prior to acquisitions, as well as conducting negotiations with Valuation Officers on our UK estate. The portfolio includes a wide range of properties from shops, offices and pubs to major leisure schemes. He has been particularly successful in mitigating our liabilities to empty property rate, which has been an issue on acquisition prior to implementing our development and letting strategy. I have no hesitation in recommending Andrew's expertise in rating valuation for all property types. The profile of property within his portfolio and the successes achieved are testament to his position as an extremely accomplished rating practitioner.

Leopold Hall, Partner, Mansford LLP