Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/504576
41 May | June | 2015 CCIM.com complemented by IPMS; however, IPMS will always be secondary to any legally mandated requirements. Where possible, the coalition will undertake to work with gov- ernments to review and update laws to ref ect IPMS. In addition, the new standard will operate alongside and enhance existing international standards such as IVS and IFRS. An international standard for measuring property was virtually inevitable in an increasingly global real estate sector. IPMS will not directly af ect transactions in the United States or elsewhere, because the sale or transacted price is not determined by measurement but rather by market forces such as demand and scarcity. T e fact that a mea- surement of an of ce building may change when mea- sured in accordance with IPMS does not change the price that an asset or liability should exchange on the valuation date between a willing buyer and a willing seller. However, the new standard could indirectly affect transactions. For example, if IPMS doubles the quoted size of a property then the price per square foot would be cut in half as a result. And if IPMS halved the size of a prop- erty, then the price psf would double to ref ect this change. T e industry largely understands the case for an inter- national standard and is prepared to be involved in this process. Most measurements have already been taken, and a free web conversion tool will be provided later this year to convert IPMS into other major standards, to allow for dual reporting in the near term. T e market sees the potential in IPMS, and participants will be ask- ing their clients to adopt it. RICS and other members of the IPMSC are helping the real estate industry get ready to deliver IPMS as the market demands it. Helping International Investors IPMS will benef t international real estate investors in a number of ways, including: • providing a mechanism for benchmarking prop- erty measurement information across international markets; • of ering a common and transportable method for property practitioners to use; • enabling international tenants, investors, and owners to benchmark their property assets without needing to spend signif cant sums of money and resources cali- brating space measurements; • providing greater transparency and consistency to all property users, wherever they are located; and • of ering consistency in the data that accompanies valuations and f nancial reporting, thereby assisting property and facilities managers in comparing and utilizing space. In summary, IPMS will provide greater con- f dence and consistency in property mea- surement for investors. Investor communities will play an enormous role in the success of IPMS, as will other stakehold- ers such as banks, property advisers, and other external stakeholders. More than 120 organizations so far have reg- istered to support the IPMS initiative as partners, and have signed declarations to help the implementation of IPMS in their businesses and markets. Specif cally, partners agree in principle to adopt IPMS measurements by either using them or requesting them within their work. Among the early partners are major corporate tenants such as Vodafone and the Inter- national Monetary Fund, as well as leading property consultancies including JLL Middle East and CBRE Middle East. T e Dubai government has become the f rst national government to for- mally endorse IPMS and Jamaica's National Land Agency recently also endorsed the initiative, with other governments beginning to follow their lead. As for next steps, the IPMS Standards Setting Com- mittee is now working on subsequent international prop- erty measurement standards and is hoping to publish IPMS for residential buildings later this year. In due course, the committee will also publish IPMS for indus- trial, retail, and mixed use. T is should bring greater conf dence and uniformity to property measurements in these markets as well. Neil Shah is managing director of RICS Americas, cover- ing the U.S., Canada, Latin America, and the Caribbean. Contact him at nshah@rics.org. The International Property Measurements Standard for Offi ce Buildings was published in November 2014. Download your copy at ipmsc.org. Olga Galushko/Veer l provi d e g reater con - n p ro pe rt y mea - wi ll p l ay su cc es s eh o ld - p ert y e rna l 12 0 re g- P MS and n s to o n o f s an d a rtners p t IPMS s in g t h em h in t h eir a rtners e nants e In te r - , as well ultancies t and CBRE g overnment has l go vernment to for - J amaica's National Land d orse d t h e initiative, wit h n in g to f o ll ow t h eir l ea d . Property Measurement s Buildin g s was p ublished D ownload y our co py c .or g.