THE Duke of Westminster's Grosvenor Group has started its first Japanese property derivative transaction based on the IPD Index for Japan.
The Japanese property total return swap follows Grosvenor’s Australian property derivative trade in May, which was the first in the market.
Grosvenor already trades in the
Property derivatives allow investors to quickly buy or sell exposure to the real estate market. They also offer an inexpensive way of obtaining the underlying exposure to property, because participants avoid much of the transaction costs involved in buying and selling property, such as agents’ and legal fees.
Grosvenor’s finance director Nick Scarles said the rise of property derivatives in
“The implementation of uniform standards for assessing property values by the Japanese government this month further increases the potential for development of the Japanese property derivatives market.
“Considering the impact which derivatives have had on other commodity and financial markets, we believe their potential impact on property markets to be huge. This potential includes the use of derivatives to inform expectations for the physical market, and as a tool enabling participants to benefit from exposure to wider property markets as well as individual investments which out-perform the market.” Scarles said.
IPD Asia Pacific’s director Dr Kevin Swaddle said the fact that the first property derivative trade in
“They have formed the basis of trades in Australia, France, Germany, Japan, and the UK, with several more countries said to be imminent,” he concluded
Australian Property Journal
