DTZ and Tullett Prebon have launched a partnership to market and run property derivative contracts in the UK and Europe.
The initial focus will be to help develop liquidity in over-the-counter property derivatives by accessing the client bases of the two firms.
In addition, the partnership will be committed to the generation of reliable and versatile data products for the sector.
The collaboration aims to combine DTZ’s property and capital-sourcing skills with Tullett Prebon’s expertise in broking new derivative products.
Tullett Prebon will run the execution and data management functions and will also market the product to its traditional customers.
Stephen Ellis, Director of DTZ Corporate Finance said: “The UK and European commercial property market is huge and it’s the largest physical asset class currently not taking full advantage of derivative products.
“Derivatives will help unlock the potential of this market by removing the absolute requirement for physical delivery thereby enabling cheaper, faster and more effective execution of allocation strategies, short-term hedges, risk transfer and geographical and sectoral diversification.
Henry Ann, head of new business at Tullett Prebon, said “Our new partnership with DTZ is the next step in advancing Tullett Prebon’s property derivatives expertise and trading capability, since its launch in July.
l Protego Real Estate Investors arranged its first significant secondary market transaction in property derivatives in October. It was a sale of £8m (e11.8m) in property index certificates (PICs).
The deal was done in conjunction with Barclays Capital.
Protego identified the seller from the
investor with whom it placed £380m of PICs
earlier this year and within three working days
of the order being confirmed the seller of the
PICs was back in cash. Five new investors successfully established PIC positions from the sale. Charles Weeks, head of new business development at Protego, said: “This transaction bodes well for the future liquidity of property derivatives as it illustrates the ease, speed and price transparency by which PIC trades can be executed in the secondary market.”