Measuring change

EDDIE CAMPBELL explains how the IPMS might be used in day-to-day practice by Irish surveyors.

The new International Property Measurement Standards (IPMS) for offices have become mandatory for Society of Chartered Surveyors Ireland (SCSI) members operating in this area from February 2016. This follows from the new RICS Property Measurement Professional Statement, which stipulates that gross internal area (GIA) will be the standard from now on, replacing the formerly used net internal area (NIA).
Standardisation of measurement practice across international boundaries is seemingly good news for those involved in the international office property sector, as it brings transparency and consistency to defining the office market globally. International clients and practitioners, corporate occupiers, developers, investors and the global property market in general will have a clear understanding of what they are getting in terms of office floor space.
In reality though, not every SCSI member operates across international boundaries in their day-to-day work. There are many who operate in the local domestic market, where NIA adequately describes the usable area of an office, and this is precisely what the domestic parties are familiar with and want to know. So how will the IPMS be used in practice by SCSI members?

Initial concerns in the UK
I was fortunate to attend a training day on the IMPS at the RICS HQ in January of this year. Early reports from its roll-out in the UK in May 2015 indicate mixed reactions to acceptance for the new GIA standard. These vary from mild acceptance to some resistance and push back. An initial reaction in the UK was that NIA is the most logical method of expressing the usable office floor area, so why not adopt this as the global template? However, there are more than 70 international bodies and agencies signed up to the IMPS, each of which has their own preferred method. Compromise on a universally acceptable global standard was inevitable, which resulted in the present GIA.

International clients and practitioners, corporate occupiers, developers, investors and the global property market in general will have a clear understanding of what they are getting in terms of office floor space.

Much of the concern expressed relates to the need to carry out new measurement surveys for existing clients where one may have been recently commissioned. There is also the potential for substantial additional costs if the building design and layout is complex and a specialist measurement firm is needed to undertake the measuring work. Other concerns included the issue of measuring tolerance, the lack of a GIA database for comparisons, and uniformity in the knowledge and skills of the surveyors undertaking the new GIA survey. This is because the new SCSI Measuring Practice Guidance Note (1st edition, May 2015) differs from and is an update to the RICS Code of Measuring Practice (6th edition), which was used in the past.

Why do we need to change?Measuring2
Having just gotten over the trauma of regulation, we must now rethink how we measure our offices. Change does not come easily to some people. Those of us around long enough will remember significant changes that were imposed on us over the years, which took time to adapt to.
After the currency in Ireland changed from Irish Pounds to Euro in 2002, it was common to hear people ask: “How much is that in old money”? After the country adopted the metric system in favour of the imperial system, it was common to hear people ask about speed limits: “what is that in miles per hour”? People still ask, when given a floor area in square metres: “what is that in square feet”? Some people still enquire about a car’s fuel consumption in terms of “miles per gallon” instead of the official “litres per 100km”. A car’s “mileage” was something everyone understood, and the powers that be haven’t yet come up with an equivalent term in metric speak; “kilometreage” doesn’t easily roll off the tongue.
Time has shown, however, that we can often adapt more quickly to change than we imagine. The IMPS is another of those changes imposed on us that will present its own challenges for SCSI members to adapt to and overcome.

Dual reporting: an option
Similar to the current practice of presenting commercial floor area in both square feet and square metres, the likelihood is that in the short to medium term, the IMPS will run side by side with the old NIA for offices. This practice of dual reporting would allow both client and surveyor to come to terms with the new GIA concept. In the long term, it is the market that will determine the importance of and preference for the new standards.
Dual reporting would also be helpful in the absence of a GIA database for comparisons. With five-year rent reviews common in office leases, it will take from five to ten years to establish a data bank of GIA examples for comparison purposes.
There are plans by the IPMS Coalition (IPMSC) to establish an adaptation multiplier that will convert the existing NIA to the new GIA. This could result in a quick fix for dual reporting, where both floor areas are provided at the same time, and avoid the need for a new survey and a potentially costly re-measurement. Potential issues that arise here are the preservation of accuracy and precision across international borders, as certain measurements are taken (or assumed) to the centre of boundary walls. Given the different construction methods and use of materials throughout the world, it is vital that whatever conversion factor is adopted, it stands up to scrutiny and provides confidence to the market.

Adopt and move onMeasuring3
When you have been around long enough you accumulate a bit of knowledge about a lot of things. The new IPMS are yet another skill set that can be learned and practiced until you become proficient in their execution. As an SCSI member, there is formal advice and guidance available to assist surveyors in getting up to speed and achieving the necessary aptitude.
As practising property professionals, it is incumbent on us to be in a position to provide our clients with professionalism and competence in measurement practice. If you are comfortable using dual reporting or ‘opting out’, there is nothing wrong with using the old NIA measurement for offices for the local domestic market in the short term. However, we are now signatories to the IPMS and should be in a position to report in the new GIA standard to demonstrate our professional competence and to keep in line with international standards.
It is natural to bring some of the past along as we progress in our journey through life. I still think of a car’s performance in terms of miles per gallon, but I am at last comfortable recognising road speed limits in km/hour and I haven’t wondered about the price of something in old money for some time now – but that change took place over 14 years ago. Maybe in 14 years’ time we will have adapted to the IMPS to the extent that there will be SCSI members who can’t remember or never heard of using NIA for office measurement. Time will tell.

Eddie Campbell

Eddie Campbell
Chartered Valuation Surveyor withcEddie Campbell & Associates,cand lecturer in property studies.