Asian property grab

Themes are the order of the day for the nascent property-linked structured products market. Issuers have been looking to tap Asia's property markets, which are a huge source of interest for European investors. But the lack of robust indexes and the potential for volatility in these markets is making things difficult for structurers. Sarfraz Thind reports

The market for structured products linked to real estate can be traced back some seven or eight years, as banks have looked to find ways for their clients to gain synthetic property exposure, at a time when the property markets have seen a near continuous one-way rise.

There have been some notable successes in the development of the product range. Barclays Capital's Property Index Certificates (Pics) range, introduced in 2004, with a yearly return in the region of 6%, has sold around £600 million