The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Property investment: Real estate derivatives go high-rise

But can their value surpass the underlying market?

Weeks: £1 billion by the year-end

The primary real estate derivatives market in the UK might soon exceed an annual £1 billion ($1.75 billion) in value for the first time, possibly indicating the beginning of an explosion in property derivative trading, according to real estate analysts. Charles Weeks, head of new business development at Protego, a fund management company specializing in property derivatives, estimates that there has been about £600 million-worth of primary real estate derivative transactions so far this year in the UK. In his view, as well as that of some other market participants, that could exceed £1 billion by the end of the year.

That number could be a small fraction of the potential property derivatives market, however. In the eyes of Nick Tyrrell, head of research and strategy at JPMorgan Real Estate Europe, the property derivatives market could be much bigger than the direct real estate market in Europe within two decades.

He points out that direct investment in property involves extremely high costs in the form of property management, tax payments, and the low liquidity generally associated with real estate.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree