The total traded value of property derivatives on the IPD UK Index stands at £10.6bn, according to data released today by Investment Property Databank and the Investment Property Forum.
The value of trading across all IPD indices, including the latest trades on the French and German indices and the first property derivative trades on the IPD Japanese, Australian, Swiss and Italian indices, is £11.5bn.
The value of property derivatives traded on the IPD UK Index rose from just below £1bn in the second quarter to £1.7bn in the third quarter.
Close to 100 trades were executed, bringing the total number of trades completed so far — including expired contracts - to well above 700.
The IPD Italian Index is the latest and seventh IPD country index to be used as the underlying for property derivative trades.
Twenty-one banks have licenses to trade IPD indices, and almost half of these banks are licensed to trade three or more national market indices.
Iain Reid, chairman of the Property Derivatives Interest Group and CEO of Protego Real Estate Investors, said: ‘Given the current lack of activity in the real property market, I think this high level of trading in the UK derivatives market will surprise a lot of people and demonstrates the important part derivatives can play in adverse circumstances.
‘The extension of trading into so many other markets is another highly significant development for international property investors.’