Property Development 101 : Area Definitions for your property development project

What measurements to use and where? 

In this short guide you will learn more about the area definitions and different methods of measuring as well as how and where they should be applied on a development project. It’s important for property developers to understand these terms in order to ensure the correct methods and measurements are being applied. Failing to do so may result in your development appraisal being inaccurate and giving you, and your investors, false information.

This guide covers area definitions of the following:

• Gross External Area (GEA)
• Gross Internal Area (GIA)
• Net Internal Area (NIA)
• Net Saleable Area 

This information is based on definitions and standards published by the Royal Institution of Chartered Surveyors (RICS).

Royal Institution of Chartered Surveyors

The overarching aim of the RICS is “to effect positive change in the built and natural environments”. As the globally recognised professional body, they promote and uphold industry standards – including on matters regarding the measurements used. Evolution5 is a RICS regulated practice which means that we comply with the best practice for the work we deliver.

These standards are set out in various publications. For the purposes of this article, we are particularly concerned with the RICS Code of Measuring (6^th Edition) which applies to all building classes except offices and residential buildings. Issued as a guidance note, this edition of the code of measuring practice became globally effective from 18 May 2015 the purpose of which is to provide succinct, precise area definitions to permit the accurate measurement of buildings and land. Whilst members are not required to apply the guidance, it is considered ‘best practice’ and as such, the application of the guidance is one indicator of maintaining a high standard of professional competence. 

The core area definitions of the code are:

• GEA (Gross External Area) 
• GIA (Gross Internal Area) 
• NIA (Net Internal Area) 

You will notice that the code refers to all building classes except offices and residential buildings. The standards of measurement of these building classes are contained in the RICS Property Measurement (2^nd Edition) and RICS International Property Measurement Standards (IPMS: Office Buildings and IPMS: Residential).

If you have any doubt as to the correct guidance to be applied to your project, you should seek professional advice. 

Let’s take a look at the definitions within the RICS Code of Measuring (6^th Edition).

Gross External Area 

The Gross External Area (GEA) is defined as “the area of a building when measured externally at each floor level”. It takes into account the entire structure and external projections, internal features such as balconies, mezzanine floors and loading bays. A full list is available in the guidance note here.

There are some exclusions from the measurement which are broadly described as voids, open sided elements such as external fire escapes or balconies, open spaces such as car parks or roof terraces and some residential buildings such as greenhouses and the like. 

The GEA is the measurement most commonly used in Town Planning, rating and council tax and in some instances building costs. 

Gross Internal Area

The Gross Internal Area (GIA) is sometimes also referred to as the Gross Internal Floor Area (GIFA) and is defined as “the area of a building measured to the internal face of the perimeter walls at each floor level”. The internal face means either the brick or block work inside the building, or the plaster applied to that brick/block work. If the occupier subsequently adds additional fixtures, these do now reduce the GIA/GIFA.

The GIA/GIFA is most commonly used for the estimation of building costs, some areas of estate agency and valuation (strict limitations apply), ratings, apportionment of property management costs and, subject to NSA conditions, the valuation of new residential developments.

Under the terms of the RICS guidance note, there are strict guidelines for where the GIA/GIFA should be used for valuation purposes and the use of this measurement beyond the applications recommended by the RICS guidance note should only be done with consideration of the provisions of Property Misdescriptions Act 1991 and associated regulations.

Net Internal Area 

The Net Internal Area (NIA) is defined as “the usable area within a building measured to the internal face of the perimeter walls at each floor level”. This is the measurement most often used for the valuation of commercial buildings, retail spaces, supermarkets & offices, for rating purposes of these same buildings and for the apportionment of property management fees for occupiers within these buildings. 

It’s important to note the inclusion of the word usable as this leads to some interesting exclusions such as internal structural walls, space occupied by building services such as boilers or air conditioning systems, circulation areas and toilets. A full list of exclusions can be found here. 

Net Sales Area 

The measurement of residential properties for valuation purposes is an interesting one with there being no one single form of measurements that is universally accepted for valuation purposes. Instead, the RICS references a number of methods that can be applied depending on the property. In all cases, the RICS would expect the valuing surveyor to be able to justify their approach if the need arose. 

That said, the Net Sales Area (NSA) refers to “the GIA/GIFA of a new or existing residential dwelling” subject to conditions and exclusions. 

In summary

When planning a property development project, it’s critical to the financial success of your project that the correct method of measurement is applied from the outset. Failing to do so can result in you, or your investors, making decisions about the projected financials based on inaccurate information. For example, you may end up with a smaller than expected space reducing the sale or rental value of the property.

How Evolution5 can help you?

Evolution5 is a RICS regulated professional consultancy offering project management, quantity surveying, principal designer, employer’s agent, and contract administration services for projects across London and the South East.

If you are in the process of undertaking a development appraisal – or are considering a project in the near future and would like to explore how the team can help you, click the button below or call 023 8040 5073.