ICAP, the world’s biggest inter-dealer broker, is launching a range of property-based derivatives, the first of their kind, that would let investors take a position on the future of the property market without owning bricks and mortar.

The company already deals in a wide array of derivatives, bonds and other financial instruments. James Adam, product head of property derivatives for Icap, said: “[Property] is the last big asset class that doesn’t have a derivatives market. It’s the obvious candidate.”

The products planned will be derivatives linked to the indices produced by Investment Property Databank, an independent body that tracks a wide range of property valuations as they occur. From these it creates a range of indices that indicate what is happening to prices in a number of different categories of property. These are used as benchmarks by the property industry.

Icap will offer professional investors the chance to take a view on what will happen to these indices over a period of three months to as much as ten years, in the same way that they can trade on what will happen to stock market indices.

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