THE Royal Institution of Chartered Surveyors (RICS) and other leading property institutions from around the world are meeting this week at the World Bank in Washington DC to launch an initiative aimed at developing a consistent international property measurement standard.
The coalition, which represents more than a quarter of a million professionals around the world, is coming together to address the challenge of inconsistent global property measurement standards, which result in low investor confidence in property, inconsistent financial data and, ultimately, global economic instability.
At present, the way property assets – such as a housing development, office block or shopping centre – are measured varies wildly from country to country.
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.
With so many different methods of measurement available, it makes it difficult for those looking to invest in these developments to compare like with like. This confusion can affect property values, lead to errors in financial reporting and, consequentially, undermine market confidence and economic stability.
The introduction of a universal standard for property measurement would ensure global consistency, leading to fewer instances of fraud, a more transparent market, greater public trust and increased economic security.
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.
The IPMSC aim is to resolve disparities by developing and implementing International Property Measurement Standards, a set of standards for measurement that are principles based and internationally applicable, to be adopted by all nations across the globe.
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.
The organisations involved in the IPMS include:
Appraisal Foundation – North America
Appraisal Institute – North America
Asia Pacific Real Estate Association (APREA) – Asia
Associação 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
CREDI – India
Commonwealth Association of Surveying and Land Economy – Commonwealth nations
CoreNet – Global
Counsellors of Real Estate (CRE) – North America
FIABCI – Global
Global FM – Global
International Consortium of Real Estate Associations (ICREA) – Global
International Facility Managers 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
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.