Holt Commercial’s Emma Hughes MRICS, Chartered Valuation Surveyor & RICS Registered Valuer, has given her take on changes to the way office space is now measured.
What is IPMS 3?
IPMS 3 is a basis of measurement for valuation, market analysis and the marketing of offices (for rental and capital valuation). It is relevant for agents, occupiers, asset managers, facilities managers, property managers, researchers and valuers. It replaces the Net Internal Area (NIA) as a basis of measurement.
What are the major differences between NIA and IPMS 3 for offices?
Useable area = (NIA) + Additional areas to be measured = IPMS
Measurements should now be taken to what is known as the ‘internal dominant face’ (the area within each vertical section (the wall) that makes up the perimeter of the building/unit). This can include inside the window recess (to include inside glazing), as long as the glazing is 50% or more of the floor to ceiling height.
In a multi-let scenario, the area occupied by the dividing wall between two tenants’ accommodation is included within the floor area and apportioned equally between the two as a limited use area. The difficulty lies in estimating how much the internal brick width is!!
Will the rentalised area increase with IPMS 3?
In theory – no, as the useable floor area calculations are representative of the former Net Internal Area.
Why have the RICS insisted that we use IPMS 3?
The reason stated is global standardisation. RICS believes that ‘one shared international standard for property measurement’ is key to transparency in the industry. The introduction of ‘one standard for all’ underpins the need to eradicate the inconsistent practices of the past and continue growth and improvement in the UK as a key global market. In doing so, RICS hopes to regain trust, boost investor confidence and increase market stability, as well as provide more comprehensive surveys.
Why is there so much industry confusion about IPMS 3?
There has been much confusion over inclusions and exclusions from floor area calculations.
The key point to take away is that the way in which chartered surveyors report has changed. There are a number of other areas that must now be measured which include:
- balconies/rooftop terraces,
- shared circulation areas,
- internal structural walls,
- common walls,
- areas less than 1.5m in height, amongst others.
To conclude, in order to properly inform clients, members of the RICS must now include in their report:
Useable floor area (this was previously NIA) + limited floor area (additional areas that need measuring, yet do not make up any of the useable floor area) = Office total (total of limited use area plus useable floor area).