Experts are tackling the issue of global inconsistencies in the way property is measured, for the sake of greater transparency and increased investor confidence
The International Property Measurement Standard (IPMS), which is being developed by a coalition of 22 professional and not-for-profit organisations from around the world, including IMF, RICS and BOMA, will address global inconsistencies in the way property is measured, leading to greater transparency and increased investor confidence, according to a release.
Last month, the coalition formed a Standards Setting Committee to draft the measurement codes by June 2014.
The Dubai Government’s announcement in support of the IPMS further enhances its bid to host the World Expo in 2020, demonstrating its desire to connect real estate markets and implement international best practice standards.
“We are proud of this achievement, which we see as being a quantum leap for the Dubai Land Department. Our involvement in this initiative supports our position in raising the benchmark for unifying property measurement standards in Dubai,” said Sultan Butti Bin Mejren, Director General of the Dubai Land Department
He added, “The efforts to unify standards should benefit property owners and investors, as it will negate some of the issues and problems that can arise from differing standards used by real estate operators. It will support transparency and trust and will contribute to the convergence of global markets. It should also have a positive role in supporting Dubai’s bid to host Expo 2020, in line with the Expo slogan “Connecting Minds, Creating the Future.”
Currently, the way property assets such as office, residential, retail and industrial are measured can vary considerably from country to country. With so many different methods in use, it makes it difficult for global investors and occupiers to accurately compare space. An example of current inconsistency is the way in which floor space is calculated. For example, in India, the concept of super areas have been used to include outdoor swimming pools, stairs, and common areas such as pavements; in parts of the Middle East floor areas 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. To remove these inconsistencies across countries in measurement practices and to create and implement an uniform measurement code, organisations from across the world have come together.
“For the Indian market too, the implementation holds significant value as due to the lack of regulation over the floor space calculation, it is a general practice in the country that property buyers are required to pay for construction that falls in FSI-free areas such as spaces for congregation, passage and common convenience such as pavements, staircases, lobby, lifts and terrace. With the implementation of a global property measurement standard, property will be consistently measured leading to improvements in valuation and financial reporting consistency across international markets,” said Sachin Sandhir, Managing Director, RICS- South Asia.
“The International Property Measurement Standard Coalition is delighted that the Dubai Government has shown its support for this important initiative,” said Ken Creighton, Director of Professional Standards, RICS.