Paul Rostas, Head of Property Derivatives in ICAP London said âThe burgeoning property derivative landscape is now a real focus for the inter-bank community, hedge fund managers, asset allocators, and property related industry groups on a global basis, and opportunities are more pronounced than many industry participants might realise.â
âThe need for derivative based structured solutions is highlighted by the recent dislocation and volatility in global markets and the scarcity of effective risk mitigation tools for property sector participants. ICAP is delighted to be able to offer bespoke solutions and alternative investment opportunities to our Asian based customers and George will play a key role in this.â
ICAP's announcement coincides with the Asian Public Real Estate Association's (APREA) 2008 Leader's Forum to be held in Seoul next week. Peter Mitchell, CEO of the region's leading property industry group said, "There is a growing awareness amongst our members of the natural synergies found between physical asset exposure and derivative based components. APREA is pleased to welcome all positive initiatives aimed at increasing index based transparency, and emerging derivatives based momentum for the property sector regionally."
Despite recognition as the worldâs largest physical asset class, the property sector has, until recently, remained devoid of truly liquid derivative opportunities in the absence of reliable benchmark indexes. Technological advances have now empowered sophisticated index providers with the necessary components to bridge this gap, and Asiaâs property sectors now stand to benefit from the resulting financial innovation.
Kevin Swaddle, Director of Asia, IPD said, âICAPâs expansion into Asian property derivatives is another signal of the potential and growing interest in real estate derivatives in the Asia Pacific region. IPD has received a dramatic increase in the number of inquiries about our existing indices in Asia-Pacific and about derivatives as an emerging tool available to investors. We at IPD are fully committed to facilitating the development of these markets through the production of robust statistics and educational events.â
ICAP has previously announced the creation of a joint venture related to the US residential property index market with Radar Logic Incorporated, the Manhattan based analytic and data company that created a leading benchmark index series.