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New RICS Measurement Standards: IPMS

January 2016 witnessed the introduction of the International Property Measurement Standards (IPMS) which has replaced the Code of Measuring Practice as formerly championed by the Royal Institution of Chartered Surveyors. Research had found that because of divergent property measurement practice the measurement of offices in particular can vary by up to 24% depending on the basis of measurement used. The IPMS has been created to reduce the inconsistencies of measurement practice between regions. According to the RICS the changes represent a major advance in international best practice and will be welcomed by investors and occupiers. It will be mandatory for chartered surveyors to follow the RICS Professional Standards: Office 6 following its introduction on 1st January 2016. However property professionals will have a 6 month readjustment period of which dual measurements will most likely be taken and used in reporting.

The key differences in practice are centred around the way offices are measured. There will be changes in terminology depending on the purpose of measurement, this becomes evident in the introduction of IPMS 1 and IPMS 2 which will replace gross external area (GEA) and gross internal area (GIA). IPMS 3 will be similar to net internal area (NIA) with a few differences and will be the method used by property professionals when analysing rents for occupational purposes.

When using IPMS 3 offices are to be measured to the ‘internal dominant face’ for external walls or otherwise horizontally at wall to floor junctions ignoring the skirting boards, cable trunking, piping and heating/ cooling systems. The internal dominant face is described as ‘the inside finished surface comprising 50% or more of the surface area for each vertical section forming an internal perimeter’.

IPMS 3 includes all internal walls and columns within an occupants exclusive area, this also includes areas with restricted height. Measurements which will be taken but reported separately include balconies, covered galleries and rooftop terraces. This undeniably will, in most cases, provide a larger floor area overall and it remains to be seen how the majority of property professionals will analyse this.

What will the changes affect?

1. There are a number of implications of the introduction of IPMS, for example we may see an increase in offices values as the areas increase. However these may stabilise once the readjustment period is over and should be limited as most practitioners will adopt a dual reporting method.

2. The new method should also help provide clarity when acting on behalf of a client at a rent review, as in theory, there should be greater clarity in the measurements taken by both parties.

3. Agent’s particulars will change to reflect the sole use of IPMS over the course of the next 6 months. However both methods will likely be used for a period of time in most cases whilst the industry adapts.

4. These changes in every day practice highlight the importance for property professionals to keep up to date with the latest directions from their professional bodies. Professionals in the industry must ensure their practice, in addition to themselves, remain compliant with the new policies to avoid sanctions. It will be interesting to see how both organisations and the market react to the new measurement regulations in the coming months.