Investors will be able to trade ‘on exchange’ property derivatives based on IPD sub-sectors early next year. Deutsche Börse-owned derivatives exchange Eurex is targeting next February to list standardised futures contracts based on IPD’s indexes for City offices, West End and Mid Town offices, shopping centres, retail warehouses and South East industrial property.
“We are aiming to launch in February, though this still has to be confirmed,” said Christian Csomos, who is responsible for product development at Eurex. Property derivative supporters hope the products will help revive the market, which had all-time low trading volumes this year. Trading is switching from ‘over the counter’, bilateral swaps partly due to exchange trading’s reduced counterparty risk.