The French and German property derivatives markets have now reached sufficient size to enable reporting of trade volumes, according to IPD. At the end of Q2 2007 cumulative outstanding notional value of French of property derivatives stood at £721 million (c. €992m) from 30 trades and the cumulative outstanding notional value of the German market is now £181 million (c. €249m) from 21 trades. The majority of these trades have start dates referencing Q4 2006.
The UK has seen continued expansion of the property derivatives market. At the end of Q2 2007 the cumulative outstanding notional value of property derivatives stood at £7.3 billion (c. €10.05m) from 473 live trades. During Q2 2007 90 trades were executed with a total notional value of £970 million (c. €1335m). The same period last year saw 54 trades with a total notional value of £513 million (c. €706m). This represents a growth of 67% over the activity in the equivalent 2006 quarter, but falls well short of the peak in Q1 2007 figures (153 trades worth a total of £2.9 billion (c. €4bn)).
The outstanding notional value figures for previous quarters have been revised up to account for trades with start dates prior to the current quarter.
The average lot size for all outstanding UK trades has fallen to £15.4 million (c. €21.2m), and the average size of trades executed in Q2 2007 stood at £10.8 million (c. €14.9m).
The total value of all new activity on the three currently traded European IPD indices (UK, France and Germany) was £1448 million (€1993m) in Q2, spread across 129 separate deals.
Click here for the Q2 2007 Trade Volumes for France, Germany and the UK.