Presentation on theme: "How big is an office of 150m²?"— Presentation transcript:
1International Property Measurement: One Standard for All PRODEXPO 2014 - Athens Liana Toumazou- RICS
2How big is an office of 150m²? Question:How big is an office of 150m²?TAF stakeholders are encouraged to:Help raise awareness of the projectSign up as Partner organisations and find out how to use IPMSSign up as Coalition member organisations (if they fit the criteria)Ask questions of the Coalition! Through TAF representative
3Why is property measurement so important? Sound measurement is fundamental to property marketsIt underpins decisions made by all property usersIt provides a tool for comparisonThe importance of measurement:Space measurement is vital. It acts as a basis for:- Valuation- Occupation / building use- Investment- Financial reporting- Public confidenceNot referring to units of measurement (feet/meters) but to the standard or methodology used to conduct a space measurement. What is included in a measurement.Measurements of space provides a use with a tool for comparison and enabled us to use space (as an occupier or an investor, for example) appropriately.
4Today, measurement standards are not consistent. Property is measured in many different ways around the world.Depending on the standard used, the floor area measurement can vary dramatically…Unfortunately, we live in a very confusing world.The world is getting “smaller” and more global in nature. So are real estate markets.However, currently there are many different standards to measuring property space. Depending on where you are in the world, property measurements will be calculated in different ways.This can mean that two identical properties in two different countries could have very different “measurements”.
5In the U.S. sometimes the air-conditioned space is used instead. In Spain, floor area measurements often include outdoor swimming pools.In parts of the Middle East, floor measurements can include hypothetical areas.In the U.S. sometimes the air-conditioned space is used instead.In India, floor measurements can include off-site car parks as well as common areas.What is included in a floor area measurement can vary significantly around the world.In Spain, residential property measurements often include swimming pools;In parts of the Middle East it is not uncommon for floor area measurements to include hypothetical floorsIn India, car parks can be included as well as common (shared) areas.In some parts of the U.S. property measurements are actually measurements of air-conditioned space and not floor areas.
6This infographic shows how different measurement methodologies can lead to very different floor area measurements of the same space.
7“Multiple standards equals no standard at all”. The Existing Challenge Different measurement standards, different outcomes (>24%)Difficult to compare like-with-likeLack of transparencyDifficult to compare cross-border transactionsHuge impact on Financial ReportingCan lead to inaccuracies poor measurementThis poses many challenges, some obvious; other less so but arguably even more severe.- One problem is that, fundamentally, it is extremely difficult to compare like for likeIt means that the property market lacks transparency (e.g. buyers/sellers not necessarily clear about the standard used)Investing across boarders is extremely difficult and makes the accurate assessment of international property portfolios very challengingA less obvious but critical issue is the impact that inconsistency in measurement has on financial markets in general. Real estate makes up a huge proportion of a companies balance sheet; it is also one of the biggest asset classes and facilitates flows of capital around the world. Inconsistent measurement practices makes it very difficult to understand exactly what space is owned across international property portfolios.It can (and probably does) lead to malpractice in certain situations and there is plenty of anecdotal evidence to suggest that property measurements can be manipulated using different approaches to achieve a pre-determined figure.
8International Property Measurement Standards are the missing link IFRSIVSIPMSIFRS is used and required by governments and companies around the world.IVS provides for a common approach to valuing assets around the world. This information feeds into IFRS.However, the measurement data that feeds into valuations is currently not standardised. As a result it undermines IVS and IFRS.An International Property Measurement Standard (IPMS) is a fundamental component that is currently missing.
9Answer: IPMS TAF stakeholders are encouraged to: Help raise awareness of the projectSign up as Partner organisations and find out how to use IPMSSign up as Coalition member organisations (if they fit the criteria)Ask questions of the Coalition! Through TAF representative
10Washington 2013: The birth of IPMS The meeting was held over two days.The World Bank provide the venue and communicated their support for the initiativeAs a group, we agreed to form as a coalition to create a standard which we would all implementSet ambitious timeframe of delivery of 2014Agreed that an independent standard setting committee would be formed to draft the standardCommitted to widespread consultation and market engagement
11BUT this is something that we are looking to address. In May, a group of 13 professional organisations from around the world met for a meeting at the World Bank in Washington. The issue: inconsistent measurement standards. The solution: a shared, internationally adopted method that professional institutions would implement, together, for the benefit of not just our members who carry out property measurements, but to the millions of people around that world that are currently affected by the inconsistent practices.
12International Property Measurement Standards Coalition (IPMSC): By the profession; for the professionProfessional members in more than 150 countriesPublic interest mandateStandards Setting CommitteeGuardians of IPMSIn Washington, the IPMSC was established by 13 organisations.They agreed to develop and implement a common international standard for measuring property, starting with offices.Invited others to come onboard12
13Since the Washington meeting the Coalition has grown to 44 organisations (at June 2014) More are joining all the time and all have committed to implement IPMS within their organisation when it launches later this year
14IPMS ‘Partners’ Sign up to support implementation of IPMS Voluntary designationAimed at users and suppliers of property measurement informationIdentifies sector leaders in the implementation of international standardsOpportunity to align with IPMSC and industry best practiceAdoption is critical.The Coalition has created a ‘Partner’ category to give commercial entities the opportunity to get more involved. The status is free and not legally binding but requires firms to signal their support for the development and implementation of the standard.- Aim is to ensure the market understands and is ready for the launch of the standard.Will include:
15IPMS Partners include: Real estate consultancy firms; occupiers; developers; measurement firms; investorsIPMS Partners are signing a declaration to support IPMS and committee to supporting their implementation.Include:Corporate occupier tenantsInvestorsReal estate advisory firmsDevelopersAcademic institutionsMeasurement companies
16IPMS Partners (August 2014): www.ipmsc.org/partners Advisors/Consultancies Asteco Property Management Newsec Baltics Binswanger GImenez Zapiola British Arabian Bulgarian Properties Ltd CBRE (Brazil) CBRE (Middle East) Chestertons Cluttons (Middle East) Colliers International (Asia) Colliers International (Japan) Cushman & Wakefield (Asia) Cushman & Wakefield (Brazil) Cushman & Wakefield (Russia) DTZ (Italia) DTZ (Middle East) Expertises Galtier Guangdong Huayou Auction Co Ltd (China) Indonesian Society of Appraisers - MAPPI JLL (Hungary) JLL (MENEA) Jones Lang Wootton Khong & Jaafar Group (Malaysia) Knight Frank (China) Knight Frank (Middle East) LLJ Property (Dubai) Miami Realtors Ping An Real Estate Company Ltd (China) Prelios (Agency, Integra and Valuations) (Italy) REAG (Italy) REESCO (Poland) Renda Real Estate Company (China) Shenzhen Sogar Engineering Consultants Ltd (China) Trigránit (Hungary) Urban Splash (Cyprus) Veritas Brown|Cushman & Wakefield Wilchesycia Your Care Consult (France)Investors Benson Elliot Deutsche Asset & Wealth Management (RREEF) Expert Invest (Bulgaria)Measurement Companies Extreme Measures Inc. Lasertech Floorplans Pace Compumetrics Inc Plowman Craven Michael Gallie & Partners Measure Masters Solid Tech LLCCorporate Occupiers VodafoneData Providers ReidinUniversities & Institutions Universitat Politècnica de València (Spain) IE Business School (Madrid, Spain) Singapore Institute of Building Ltd (SIBL) Universidad Europea Madrid (Spain) Lisboa School of Economics and Management (Portugal) Neapolis University Paphos (Cyprus) Politecnico Milano (Italy) SDA Bocconi (Italy) Vienna University of Technology, Continuing Education Center (Austria)Developers/Construction China Harbour Engineering Company Ltd Hip Hing Construction (Hong Kong) Hong Kong Jockey Club Iacovou Construction (Cyprus) LangdonSeah (Beijing) LangdonSeah (Hong Kong) Rider Levett Bucknall Shui On Properties Management Ltd (Hong Kong)Government Auckland Council Property Ltd Housing New ZealandOther Microtop C.L.I. s.a.IPMS Partners to date….
18Next steps Coalition will review before it is launched IPMS will be adopted and implemented by Coalition organisationsThe standard will be published on the IPMS Coalition’s websiteNext: Residential, industry, retail and mixed-useIPMS for Offices currently out for a second round of consultation which will run until 15 September 2014Coalition aims to publish the final standard before the end of the year.Expected to be used alongside existing standards at first but emerge as market best practice over time, providing a common language for property measurement throughout the world.
19Thank you & Questions Liana Toumazou – email@example.com TAF stakeholders are encouraged to:Help raise awareness of the projectSign up as Partner organisations and find out how to use IPMSSign up as Coalition member organisations (if they fit the criteria)Ask questions of the Coalition! Through TAF representative