Commercial property derivatives ‘likely to grow’


The commercial property derivatives market is likely to grow, according to ING Wholesale Banking.

Its head of property derivatives told a Thomson Reuters conference the market was set to increase by seven per cent year-on-year, the news agency reported.

“It’s modest growth, but still quite good considering what’s happening in other real estate markets,” said Rawle Parris.

Fund managers are now expected to better manage their assets and Mr Parris suggested new clearing houses for property derivatives could improve the market.

Direct investment in commercial property has tumbled and according to the Royal Institution of Chartered Surveyors, prices still have some way to fall.

“On a positive note, the rapid re-pricing across the market has pushed UK yields to among the highest in the developed world with a very wide gap emerging compared to finance costs,” observed senior economist Oliver Gilmartin.ADNFCR-1329-ID-18921926-ADNFCR