Property Derivatives
All posts tagged: Nomura
Market Commentary: Surge continues
The market shook off the holiday blues with gusto this week and continued its surge upwards. The Dec 09 contract traded at -500 and then again in small size at -400 but settled back at -500 mid.
The Dec 10 contract traded up at +175, offering an implied return of 8.5%. The strength of the bids in the market came as a surprise given that there are mounting views that we are not out of the woods yet!
BNP Paribas Real Estate (BNPRE) released research this week stating that the commercial property recovery will take more than five years to fully recover.
BNPRE reported a pessimistic view on capital values, which they think will be hindered by occupier demand.
BNPRE research director Keith Steventon said: “There is always a risk, of course, and this is that the economic recovery that everyone is looking towards is not sustained and this brings any burgeoning property recovery down with it.”
Japanese bank Nomura this week completed its deal to occupy the whole of Watermark Place in the city of London with a 20 year lease. Nomura agreed a rent of £40.50 per sq ft with a 2% and 4% collar and cap on review. Including benefits, the rent free period equates to nearly six years.
