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Stable pricing suggests weak year for returns

By: Language: English Series: Property Week ; 78(16) 20 April 2012, 38(1) Publication details: 2012Subject(s): Summary: Royal Bank of Scotland estimates that around £400m for UK commercial property derivatives contracts was traded in Q1 2012, £60m more than Q4 2011. The turnover in the direct physical property market was £5.8bn over the same period. Discusses the strategy of using derivatives to buy commercial property exposure to reduce "cash drag"within funds. Suggests investing in swaps or property futures as a way for a property fund manager to be fully invested in real estate at all times with the benefit of a cash buffer if any redemptions occur. Graphs depict property derivative pricing by calendar year.

Royal Bank of Scotland estimates that around £400m for UK commercial property derivatives contracts was traded in Q1 2012, £60m more than Q4 2011. The turnover in the direct physical property market was £5.8bn over the same period. Discusses the strategy of using derivatives to buy commercial property exposure to reduce "cash drag"within funds. Suggests investing in swaps or property futures as a way for a property fund manager to be fully invested in real estate at all times with the benefit of a cash buffer if any redemptions occur. Graphs depict property derivative pricing by calendar year.