Group Nears Global Standards for Measuring Property
A committee of industry executives focused on creating the first-ever international standards for measuring property expects to issue a first draft by next June.
The International Property Measurement Standards Coalition, formed in May, created a Standard Settings Committee last month, comprised of 19 members representing 11 countries. Progress has been "very positive and very fast," Ken Creighton, director of professional standards for the Royal Institution of Chartered Surveyors (RICS), told WPC News
"Frankly, we have moved past what I thought were the major challenges," Mr. Creighton said.
"The biggest challenge in my experience is getting the commitment of all the entities to adopt it."
Current measuring standards vary widely from country to country, making it difficult to accurately compare and value property. Some markets might measure an office space from the inside of the wall; others from the outside. The patio of a luxury condo or a garage may be included in the advertised floor space in one country; but excluded in another.
"It's an embarrassing problem, frankly," Mr. Creighton said.
Creating standards will aide valuations, bringing consistency in pricing and financial reporting from market to market. The result will be "a more transparent marketplace, greater public trust, stronger investor confidence, and increased market stability," the group announced at a press conference hosted at the World Bank in May.
The coalition includes some of the largest industry organizations in the world, from the International Monetary Fund, the Building Owners and Managers Association and the International Real Estate Federation (FIABCI); to the China Institute of Real Estate Appraisers and Agents, the South African Property Owners Association and the American Society of Farm Managers and Rural Appraisers.
The Standards Setting Committee's next face-to-face meeting is scheduled for Sept. 18 in Brussels. Initial efforts are focusing on high rise office buildings, with industrial and residential to follow. Future efforts will focus on land and construction material.
"We will be looking at a number of different standards that are in use in various markets around the world," said Jones Lang LaSalle's Max Crofts, chairman of the Standard Setting Committee, in an e-mail to WPC News. "They will all be analysed in a neutral way in parallel with identifying the needs of the cross-border investors and multi-national occupiers."
All the involved organizations are "committed to the creation and implementation" of the standards, Mr. Creighton said.
While the standards group cannot force the industry at large to adopt the standards, all the member organizations have agreed to use them.
The standards will be implemented "because major players will immediately recognize the benefits, and the rest of the market will follow," Mr. Crofts said. "It will be an inevitable, but not overnight, progression."
For RICS members, "if you don't use the standard then you won't be a member of RICS," Mr. Creighton said.
The coalition is not pressing for a particular standard, members emphasize.
"As long as we do it the same way, it doesn't matter," Mr. Creighton said. "The market will demand this."
Video: RICS Joins Global Coalition