A year ago, the Royal Institution of Chartered Surveyors and its partners introduced a new measurement system for office buildings called ‘IPMS’. We believed IPMS was flawed and carried out research to prove it. We then travelled around the UK explaining our findings to major firms of lawyers and our clients. So what if any effect has all this had on the adoption of IPMS?
The RICS made it a mandatory requirement for its members to introduce IPMS. To our immense relief, only a very small number of firms appear to be adopting the new measurement system. There is still work to be done but common sense seems to be prevailing right now particularly, in Manchester where the vast majority of agents and landlords agree that the system is misleading to consumers (i.e. office tenants).
Our criticism of IPMS is that it allows less scrupulous landlords and their agents to exaggerate the usable floor area of an office. Very few occupiers or indeed investors have ever measured an office building, so they simply don’t know whether the area quoted to them is correct or not. As the majority of tenants do not retain a property professional to negotiate their lease, a huge number of consumers risk paying too much rent.
To put some scale to the problem, if every office had its floor area quoted on an IPMS basis, landlord could charge tenants an average of 7.5% more rent than they currently pay. This adds up to around £70 million a year in extra rent across the UK office market.
Our advice is simple, before signing a lease check the floor area and do not agree to pay rent on the basis of an IPMS measurement. If you are in any doubt, please call Martyn Markland on 0161 457 1422 or e-mail him at mm@tenantag.co.uk.