Property groups from around the world are hammering out the final details this week on global standards for measuring buildings.
The new standards would eliminate nagging inconsistencies which make it difficult to compare and value buildings around the world For example, some countries include balconies or garages in floor. In Spain swimming pools are included in the calculations, the Financial Times notes
"What might count as 1,000 square meters of property in one country will be only 700 square meters in another," Kenneth Creighton, director of professional standards for the Royal Institution of Chartered Surveyors, told the FT. "For an industry of this scale, the financial leakage from these inconsistencies represents a serious issue that needs addressing."
A total of 27 different trade organizations are working on the issues, including the Royal Institute of Chartered Surveyors, the Counsellors of Real Estate and China's Institute of Real Estate Appraisers and Agents.
The ramifications of the process are far reaching. More than 50 per cent of the national wealth of the world's economies are tied to land and real estate assets, according to the World Bank, which is overseeing the process. But the criteria for valuing those assets differs tremendously from market to market.
"I welcome an initiative that will bring portfolio-wide, global consistency to space measurement and which, for the first time, will allow the industry to benchmark good space-use practice from wherever in the world it may be," Julian Lyon, manager of European real estate for General Motors, told the FT.