Electronic Data Exchange for Real Estate

June 30, 2002

What is PISCES?

PISCES stands for the Property Information Systems Common Exchange Standard.

The PISCES Standard is a set of definitions and rules to facilitate electronic transfer of data between key business areas and between different types of software packages that are used regularly by the property industry. It is not itself a piece of software but an enabling technology that allows software providers to prepare solutions within their own packages to transfer data between databases. This provides the attractive prospect of seamless transfer of data within and between systems and organisations.

Development of the standard originally stemmed from the need to transfer management and valuation data between systems and so was focused on this sector of the UK property market.

However the stated goal of PISCES is that it will ultimately embrace all data transfer requirements of the real estate profession worldwide and progress is rapidly being made to achieve those aims.

Legal developments

Most recently PISCES has established a Legal Working Group and has already engaged a wide range of lawyers with representatives from major UK law firms, including Linklaters, Berwin Leighton Paisner, CMS Cameron McKenna, Lovells, Dundas & Wilson and S J Berwin, as well as key UK investors. Under the chairmanship of Mark Riddick of Searchflow, this group shares a common goal – to define a standard for electronic transfer of the data required by lawyers and their clients when transferring property title or drafting new leases.

This group has now met twice and has committed to achieving its objective of “ensuring that PISCES supports the property-legal process in a way that is accessible and conducive to widespread adoption and ultimately facilitates faster transactions.” within a demanding 12 months.

The group is also in discussion with HM Land Registry and other government bodies and will be defining the standard data elements required to complete due diligence on a transaction and to register title or grant a new lease. Contact has also been made with the Valuation Office, Ordnance Survey, Council for Mortgage Lenders and the Legal Software Suppliers Association.

Those interested in obtaining more information about the Working Group can view its Charter, as well as minutes of the meetings, via the PISCES Web site at www.pisces.co.uk.

Financial data developments

The standard will be extended, by December 2002, to provide a standard procedure for transferring the financial data required for performance measurement calculations, and to transfer financial data from one property management system to another without the loss of any information required for management reporting. Once it becomes available as an export facility from property management packages, it will be possible to transfer all data required for performance measurement and analysis purposes by means of PISCES Standard files.

International developments

As local standards have limited shelf-life in the modern world, it is recognised that it will be necessary to develop PISCES into an international standard. The DCN initiative in the US is the principal alternative to PISCES and every effort will be made to forge links with the Data Consortium to bring the work of the two groups together. A working party is also being formed to take this forward. Participants will be encouraged from firms and individuals who can contribute on the basis of their own international experience. Local or regional initiatives will be supported where they can assist with the overall aim to develop a single global standard.

Why has PISCES been developed?

The need for a standard for transmitting property data stems from the dispersed business relationships which are inherent to the real estate industry. Properties are commonly owned by one party, externally managed, and independently valued by another party. Owners and managers need to export data to lawyers, and to third party service providers to populate portfolio models or performance measurement software.

Property data is dynamic. Each time that there is a rent review, assignment or lease renewal, the data held by all of the parties involved in the ownership, management and valuation must be updated. But this pales into insignificance compared to the volume of data that must be transferred when a large shopping centre is traded. On these occasions all details of title, physical dimensions, lease details and assignments must be entered into the investor’s own system, and sent to his lawyer, managing agents and valuers. The data transfer task is of a different order of magnitude from the record keeping exercise associated with the acquisition of the equivalent value of securities.

And the data transfer/update issues are not limited to the commercial property sector. The same principles could equally apply to the residential market. The HMLR E-conveyancing Consultation comments “Simply by delivering correspondence and documents electronically at every stage we could reduce significantly the time taken for property transactions”.

This would require a common data exchange standard like PISCES.

Electronic transfer of information directly from one system into another removes the need to send hard copy and, more importantly, the need to re-enter data manually. Re-keying data is not only time consuming, but also carries substantial business risks. Although data is nowadays readily ported between offices in the form of electronic file attachments that can be sent via the Internet, the data content cannot be read directly into the receiving system. Even if the data is received in a standard proforma (a Land Registry search request, for example), it currently remains stuck in that file.

The need for more frequent exchange of data between systems is driven not only by the possibilities that have been created by the availability of the Internet, but also by the sharp acceleration in the pace of change in information technology which necessitates more frequent upgrading of systems. The upheaval caused by the need to migrate data accurately between old and new systems will be familiar to almost every business person today. Software vendors have been able to write bespoke software to transfer data into their systems, but this is costly because each system is different and requires a separate routine. Universal transfer standards are designed to overcome these problems

XML – The technology behind the vision

The beauty of the PISCES standard is its relative simplicity. It is one of a family of modern standards for electronic data transfer that are being developed using Extensible Markup Language (XML). XML has been developed and is supported by the world’s leading technology companies who formed the World Wide Web consortium (W3C) to control the development of the Internet. It has been defined by W3C to meet the explosion of international demand for transfer of data between systems and via the Internet. As well as being well supported, it is licence free and platform independent.

The advantage of XML format over ASCII, CSV files or spreadsheets to transfer data is that it allows the many-to-one relationships, such as multiple head leases or multi-tenant properties, that are characteristic of property data, to be presented in a single continuous file. A PISCES file can contain data about a whole portfolio of properties or a single property or lease, so that PISCES links can be used to update partial or complete data whenever new information is created.

XML files are flat text. They are designed to be read by computers, not people. However, a PISCES file can be opened and inspected using the PISCES Browser, which is available free from the PISCES Web site. The Browser provides a search facility that allows the user to open and view the data set out in a tree structure. It can also be used by software developers to check that a file compiles correctly and satisfies the requirements of the Standard.

What benefits will PISCES bring?

The Investment Property Forum (IPF) has prepared an independent appraisal of the benefits of PISCES for its members. Even at its current early stages of development, they have identified ten important potential benefits of the PISCES Standard to property investors:

  • quicker and more flexible exchange of data between organisations
  • saves cost and delay of manual data entry
  • reduced business risk from data entry errors
  • enhanced ability to take on new briefs
  • flexibility to package briefs on a more specialised basis
  • comprehensive data integration within your own organisation
  • freedom of choice of software suppliers
  • faster transactions
  • compatibility of property data with other inter- or intranet information sources
  • compatibility with the Data Consortium Network (DCN) initiative.

The Investment Property Forum paper concluded that ‘The need for the involvement and support from all areas of the property market is critical’. All IPF members are encouraged to support the PISCES initiative for the benefit of the industry as a whole. There is no money to be made from developing or operating standards and their existence can only be ensured by widespread recognition of a communal self-interest.

Collaboration is the key

It is this communal self interest which is of key importance. What is required is a single standard to be defined for each data exchange that everyone can live with. That means a cross-industry group working together to define the necessary specifications.

Without this we will arrive at a situation where multiple standards exist. This would provide only a limited increase in efficiency as we reach a stage where either each party deals only with those who use sufficiently similar exchange standards, or they implement a sophisticated technology platform enabling the support of a multitude of standards.

PISCES has been in existence for six years now, and has the organisation, structure, discipline and experience to rise to the challenge of providing a single standard.

PISCES Business Structure

The Business structure of PISCES Ltd, the company set up to administer the Standard, is ideally suited to provide the level of collaboration required. It is a non-profit-making company limited by guarantee and operated like a club, providing services for its members. Financial support is provided through membership fees.

The membership of PISCES is at two levels: Executive and Associate. Executives provide a greater degree of funding, £10,000 per year, and can direct the company and the development of the standard. Associates demonstrate their support for the standard by contributing £2,500 per year and help to raise awareness and promote the standard within the industry.

The company employs one full-time and two part-time members of staff who report to a board of directors, nominated and elected by the Executive members. The board itself operates with support from the Technical Group – a volunteer group of members, chaired by the Technical Manager. This group is responsible for the co-ordination of all Working Groups, ensuring consistency across the separate parts of the Standard, providing technical support to users and being generally responsible for all other technical aspects of the Standard.

The process of evolution of the Standard is managed by the Board of PISCES Ltd, following a procedure based on the method recommended by the Worldwide Web Consortium (W3C) for the development of XML standards in general. A document describing this process in full is available on the PISCES website.

Growing membership reflects industry support

Since the move to this membership model in November 2001, PISCES has attracted no less than 15 Executive Members from across the industry, including British Land, Aberdeen Property Investors, PruPIM, Berwin Leighton Paisner and CMS Cameron McKenna. These members represent some of the largest companies involved in institutional property investment management, independent asset management, legal services, professional services, software supply and consultancy services. I must not forget to mention the Royal Institution of Chartered Surveyors, who are not only an Executive Member but also have one of the five board seats.

A further 28 companies have now taken Associate Membership and new members are joining every month.

The overwhelming interest in supporting PISCES has been driven by the appreciation of the potential benefits. Nick Ritblat, Director of British Land has said “We are committed to PISCES which we see as an important step in the continual drive to improve efficiency and transparency in the market. It also provides a broad foundation for new initiatives, particularly when it comes to better management of information and processes.”

Martin Moore, Managing Director at Prudential Property Investment Managers, stated that “At Prudential we are always looking at ways of working better and smarter. It is clear to me that PISCES presents us with real opportunities to tackle issues that in the past have seemed insurmountable. It provides us with a key that allows us to unlock the value within the data we hold and provides operational flexibility that was previously prohibited by technology.”

With such large property owners and managers as PISCES supporters it is inevitable that lawyers will be encouraged by them to get involved and take advantage of what it has to offer, especially as it is the lawyers who generate a great deal of the data and act as its quality guarantor.

Timing is everything

Fortunate timing has also helped PISCES success. The property industry is just beginning to feel the pressure of reform, perhaps even revolution. While we all watched the ‘dot com’ frenzy come and go with little impact, what is happening now is far more subtle and yet will have much more effect.

We all recognise the internal pressure to improve efficiency. The current economic climate has led to the need to control or cut costs. Some of the more technologically advanced companies have seen the opportunities to invest in IT to bring long-term savings and the operational benefits of streamlined business processes. However, hot on the heels of the economic changes come the fundamental changes driven from the heart of government: the ‘Electronic Government’ project is starting to bite. We have seen the introduction and rapid adoption of the National Land Information Service (NLIS) channels. This is the first step towards an entirely electronic property transaction process.

On 28 May, HM Land Registry published its consultation paper on electronic conveyancing (see www.e-conveyancing.gov.uk) and over the next two to three years it will also complete the vectorisation of the title extent polygons that currently exist as red-lined shapes on the Index Map. Ordnance Survey are also standardizing the description of land packets with HMLR, at last avoiding that metre or so left to interpretation under the felt-tipped red line around Land Registry maps.

The new lease code, launched just a few weeks ago, emphasises the need for greater transparency and by implication better information management and finally, one of the dot coms that refused to go away, PROPEX, at last seems to be receiving support from both investors and agents.

What has all this got to do with PISCES? It is very simple: all of these initiatives are predicated on the ability to exchange property information electronically. Without this ability, none of them can succeed. What is more, PISCES can provide a single standard embracing all of these areas, leading to much wider adoption and, crucially, bringing the cost of participation in these initiatives down dramatically.

Searchflow’s CEO and PISCES legal working group chair, Mark Riddick concludes “the e-conveyancing initiatives provide focus and opportunity to harness technologies like PISCES to make residential conveyancing as well as commercial property transactions more transparent and thus more efficient. Effectively, it adds up to not having to enter things more than once, freeing resources and reducing scope for error.”

Catherine Williams, PISCES Technical Manager: catherine.williams@pisces.co.uk

For more information on PISCES Ltd, including how to become a member, visit the PISCES Web site at www.pisces.co.uk