International Property Measurement Standards (IPMS) will increase transparency in the Middle East’s real estate markets, bolstering investor interest in the region, a real estate research consultancy boss said.
IPMS coalition, a committee formed to set global standards for measuring property, has selected 19 real estate experts to form a standards setting committee.
“This is good news for the Middle East and North Africa (MENA) real estate markets,” said Alan Robertson, CEO of Jones Lang LaSalle Middle East & North Africa.
“For the first time investors will be able to use an internationally agreed standard methodology to measure property assets across the real estate market.”
Robertson said that currently the market is measured differently between countries and even between developers within the same country. This has in turn resulted in the application of different methods for measuring rentable and saleable areas.
He points out an example of confusion over the legitimacy of including balconies within the saleable area of the residential units or the inclusion of common areas like corridors and washrooms within leasable areas of an office building.
“This creates confusion and a lack of transparency in the market and consequently makes it difficult for both tenants and purchasers to make informed decisions,” he said.
Robertson said that a discrepancy in standards of measurement among developers is increasingly becoming a problem in the Middle East and is affecting transparency in the region.
“Research by Jones Lang LaSalle shows there is a clear correlation between transparency and investment in the real estate market. The adoption of a more structured approach to measuring buildings should therefore boost confidence and attract more investment into the regional real estate market,” he said.
Robertson also encouraged the government and local developers to implement any new international measurement standards that emerge from this initiative.