The total volume of IPD Property Derivatives traded in the first quarter of 2008 rose to a record £3.67bn (EUR 4.7bn), more than double the amount traded in the last three months of 2007. A total of 283 trades were recorded in the first quarter of 2008, surpassing the previous record of 236 transactions seen in the last quarter of 2007, according to data released by IPD and the Investment Property Forum.
The total volume of IPD Property Derivatives traded in the first quarter of 2008 rose to a record £3.67bn (EUR 4.7bn), more than double the amount traded in the last three months of 2007. A total of 283 trades were recorded in the first quarter of 2008, surpassing the previous record of 236 transactions seen in the last quarter of 2007, according to data released by IPD and the Investment Property Forum.
The IPD said that the total amount traded on the IPD Index Property Derivatives now stands at £17bn. The IPD UK Annual Property Index continues to underlie the majority of trades, accounting for £3.44bn of the total notional traded in the first quarter of this year. Trading on IPD's European indices has continued apace, IPD said. A total of £116mln of IPD France Derivatives were transacted in the first quarter, while Germany accounted for £110mln .
Ian Cullen, co-founding director of IPD and head of Systems and Information Standards, said: 'The biggest quarterly property derivatives volume on record coincided, in the first three months of this year, with the largest single quarter's divestment from their direct property asset bases by UK institutional investors. Whilst exposure was being managed synthetically to the tune of £3.4bn, direct property sales receipts to IPD quarterly index funds rose to over £4.5bn, and purchase and development expenditure dropped below the billion pound mark to deliver easily the largest quarterly net disinvestment total on record.'
Nick Scarles, chairman of the Property Derivatives Interest Group and Group Finance Director, Grosvenor, said: 'This substantial increase in volumes confirms that property derivatives are here to stay. Derivatives are now an accepted means for an increasing range of institutions and other professional investors to adjust their exposure to the UK property sector. The volumes also clearly demonstrate the London financial markets' ability to provide financial risk management tools in response to this important sector's needs.'
