[Skip to content]

FM World logo
Text Size: A A A
21 June 2018
View the latest issue of FM
Sign up to FM World Daily >
FM World daily e-newsletter logo


Firms face rent rises for ‘space they can’t use’

7 January 2016 | Herpreet Kaur Grewal

The new International Property Measurement Standards (IPMS), which were introduced on 1 January, could cost UK businesses £1 billion a year, according to a report by a chartered surveyor.


Martyn Markland, who runs a chartered surveying firm in the UK that acts for commercial tenants, has written a report to highlight the concerns many within the industry share, but are unwilling to voice in public.


The issue will affect every business that leases office space as well as the professionals that work in the sector including lawyers, architects, and facilities managers.


Markland said: “Whilst the changes will undoubtedly be welcomed by landlords and developers, I suspect most businesses are oblivious to the impact they will have on rents and other property costs.”


The standards, which were announced in 2014, have been set by the International Property Measurement Standards Coalition (IPMSC), an international group of professional and not-for-profit organisations working together to develop and embed a single property measurement standard.


According to Mark Whittaker, deputy chair of the British Institute of Facilities Management, North Region: “The whole issue of the new IPMS 3 measurement is something that facilities managers need to be aware of, particularly given the potential upward pressure on office rents and frequency of disputes.” 


In Markland’s opinion, the replacement of the existing measurement standard that applies to offices – namely, Net Internal Area (NIA) – is unnecessary. He points out that most of the world’s property markets including the UK use NIA because it reflects the true value of space from the end user’s perspective.


Markland explains: “The IPMS alternative to NIA requires columns, buttresses, party walls and other structural intrusions to be included in the floor area measurement, which effectively means that business owners will now be paying for space they cannot physically use.”


Most UK office tenants are unaware of the switch to IPMS and this lack of awareness might result in tenants paying more rent than they should, says the report.


Under the old system the lettable floor area of the office used in the example was 1,745 square feet (NIA), but from 1st January it will rise by 12 per cent to 1,955 sq ft under IPMS. Unless the landlord reduces previous quoting rent of £14.50 per sq ft (NIA) down to £12.94 per sq ft (IPMS), which Markland argues is unlikely, an unsuspecting tenant will end up paying £3,000 a year more rent for the same amount of net internal area.


A free copy of Markland’s full report entitled Business Face £1 Billion Bill For Office Space They Cannot Use can be requested from Tenant Advisory Group by emailing ipms3@tenantag.co.uk, quoting ‘Report’ in the subject line.