Property swap analysis could have softened commercial property market crash
Implied total returns suggest UK property market was overheating in 2006.
A more liquid and heavily traded property derivatives market could have softened the impact of the UK commercial property crash, particularly if market participants had monitored implied pricing in the sector, end users have claimed.
Property swaps are total return swaps based on an underlying commercial property index. In the UK – by far the most liquid and heavily traded market for the product – swaps overwhelmingly reference the Investment Property Databank’s (IPD) annual all property index
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