NEW GLOBAL STANDARD FOR MEASURING RETAIL

International retailers and owners of retail property will soon have certainty in the measurement of the shop and shopping centre. The International Property Measurement Standards Coalition (IMPSC) has just released the second IPMS Retail Buildings Consultation Draft for industry feedback which closes 9 April 2019. Later in April the Standing Setting Committee (SSC) will be meeting for a week-long face to face in Frankfurt Germany to consider the feedback and finalise the Standard.

I think the concept will be to lock us in a room for the week and not let us out until we reach agreement. 

Retail has presented a far greater disparity in global measurement practices than we faced in the Office, Residential and Industrial Standards. The Office and Residential have already been incorporated into the Australian Property Institute Technical Information Papers which reflect ‘Competent Professional Practice’ for the valuation profession in Australia.

The SSC had the first draft of the retail standard completed in October 2016. It took nearly 2 years to issue the first consultation draft and then a further 8 months to incorporate the feedback and agree on the current draft. The standard needs to be something that works in all markets and the SSC experts who have put this together come from countries including United Kingdom, Russia, Belgium, Germany, Italy, India, China, Japan, Malaysia, United States, Brazil, South Africa, New Zealand and Australia. The professional fields of expertise are just as broad.

It is not as though we have been sitting idly waiting for it to happen. The SSC is a very active committee that meets monthly for a 2 hour telephone hookup and, on the retail standard, we have already had face to face meetings in London, Johannesburg and Sao Paulo. Retail measurement is surprisingly a very complex issue.

By way of background IPMSC was established after a meeting at the World Bank in May 2013. There were 20 founding members including Australian Property Institute, BOMA International, Property Council of Australia and Royal Institution of Chartered Surveyors to name a few.

IPMSC has now grown to 89 members across the world. Each member is a membership based not for profit organisation with a public interest mandate and focus on property. IPMSC is dedicated to establishing a consistent, globally transparent standard, for measuring buildings. Historically there has been no consistency in the measurement of the built environment. In Australia, for example, Strata Title is measured differently in every State and Territory. That absurdity is minor, in comparison to the historic global variations.

The Consultation Draft separately considers Shopping Malls, Strip Centres, High Street and Stand- Alone retailers. As far as possible we have maintained consistency across each sub-asset class and further consistency with the already issued standards of Office, Residential and Industrial.

There are some novel ideas for the Australian market particularly the identification and treatment of a Mall Line in Shopping Malls and in particular the foodcourt as distinct from a Shopfront for High Street development.

The Consultation Draft can be downloaded from the IPMSC Website https://ipmsc.org/.

Let us know now what will and will not work for you. Do not wait until it is globally adopted and then start raising concerns. We look forward to feedback from:

Commercial firms: All firms providing services in land, property, construction, infrastructure and related professions.

Practitioners: Individuals who are members of coalition organisations. This will include but is not limited to: architects, civil engineers, structural engineers, quantity surveyors / cost consultants, commercial project managers, building surveyors, facilities managers, planning and development specialists, property managers, valuers and real estate investment specialists.

Users: Retailers and any recipients of advice or services from commercial firms or from individual practitioners.

Public sector: Including government departments, regulators and quasi-autonomous non-governmental organisations.

Not-for-profit associations and education: Other membership, trade or professional bodies operating across land, real estate, construction and infrastructure, academic bodies, consumer organisations.

How do you respond?

1.        Fill in the IPMS Retail Buildings Consultation Document response form

2.        Email the response to [email protected]

3.        Please note all feedback must be provided in English

We do not expect overnight abandonment of the existing Property Council of Australia Standards. To do so would be unrealistic. Leases may have rental based on measurement with terms of 10 years plus. Valuers still need to compare like with like. The standards however provide guidance on how IPMS measurements should be phased in.

Allen J Crawford FRICS FAPI

Member – SSC of IPMSC

Managing Director Chesterton Corporate Property Advisors