A fresh effort is being made by over 80 property professions around the world, including chartered surveying, to adopt an updated International Property Measurement Standards (IPMS).
he issue arises because of the lack of consistent measurement standards around the world, which causes confusion in globalised markets. As the standard’s authors say, our profession, and consumers deserve better.
The new standard, ‘IPMS All Buildings’ supersedes previous versions and in theory, all chartered surveyors here should now be using this standard. However, while 200 governments and companies have agreed to adopt the new standard, there has been resistance, both here and in the UK at least, to previous attempts at change.
The Achilles heel will continue to be the proviso that surveyors should use the new standard, unless their client wishes otherwise, and there is no obvious desire among clients to change.
Hibernia Reit was notable in its efforts to adopt the standard previously but unless there is a groundswell of demand for change, similar to the drive for “greener” buildings, the market will likely continue with current practices.
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There are anomalies in Ireland that could certainly do with streamlining.
One that has surprised many an overseas property advisor, who thought that they had found great value in a suburban office building, is that office type buildings in locations that were traditionally zoned “light industrial” eg Sandyford, Co Dublin, are measured on a “gross internal floor area” basis.
There are anomalies in Ireland that could certainly do with streamlining
Thus, lobbies, toilets and plant rooms are regarded as rentable space, whereas the same building in a city zoning is measured on a “net lettable floor area”, where these are not rentalised.
What were called “factories” in industrial zones and on IDA estates are currently measured on a “gross external basis” – around the outside of the building. But the nature of manufacturing has changed and today’s “factory” is more like an office building, for example, manufacturing software. But how should it be measured?
Even for office buildings in a city, differences arise between the standard and the existing “net lettable area” basis. The first is that the space taken up by structural columns is included and rentalised under ‘IPMS All Buildings’ but is excluded under “net lettable”.
Also, under the standard, office buildings should be measured internally, to the internal face of the dominant wall surface. So if a building facade is 55pc glazing, one measures to that even if it protrudes beyond the wall.
For a “net lettable area” one measures to the internal wall only.
These differences may seem trivial, but can equal millions of euro
Office agents tell me that problems are already arising in the measurement of modern office buildings with dominant glazed facades, with disputes over whether the measurement should be taken to the face of the glass, or to the frame holding the glazing in place, which extends into the building.
These differences may seem trivial, but a difference of a few inches over a large floorplate, multiplied by maybe 15 floors in a building, multiplied by the rent per square metre, and capitalised at a 4pc yield can equal millions of euro.
A major barrier to conversion to a new standard is that the market revolves around enormous amounts of data, collected over decades, for comparison, valuations and rent reviews, and converting much of that into the new standard is a gargantuan task.
Just as we still speak in “square feet” and not “square metres”, I suspect that change will be slow.