REAL ESTATE - US broker GFI has launched a joint venture to broker Hong Kong property derivatives to banks, funds and property companies.

GFI has already set up a similar property derivatives venture in London with CB Richard Ellis. However, in that case the indices already existed.

The Hong Kong venture, with real estate consultancy Colliers, will rely on an index based on repeat sales and developed by the University of Hong Kong’s Department of Real Estate and Construction.

"Hong Kong is a tightly defined, volatile market. There are good data there," said a GFI spokesman.

Colliers claims the Hong Kong property market is worth HK$320bn.

Jurgen Breuer, GFI’s senior managing director for Asia, said derivatives would enable faster, cheaper and more effective execution of asset allocation strategies, short-term hedges, risk transfer and geographical diversification. In short, he said, the derivatives market would revolutionise property investment in Hong Kong.