Grosvenor Pioneers Australian Property Derivatives

Grosvenor, a leading privately-owned property group with interests in 17 countries, has carried out the market's first Australian property derivatives transaction. The two-year trade was executed with ABN AMRO.

San Francisco, CA (PRWEB) May 23, 2007 -- Grosvenor, a leading privately-owned property group with interests in 17 countries, has carried out the market's first Australian property derivatives transaction. The two-year trade was executed with ABN AMRO.

The Australian property swap is the latest step in the rapid international expansion of the property derivatives market. The U.K. market has grown from a standing start two years ago to £6.5bn (AU$16bn). The U.S. market is developing and trades have recently been done in France, Germany and Hong Kong.

Nicholas Scarles, Group Finance Director, Grosvenor Group, said: "This transaction, coupled with our other small trades in the UK and US, demonstrates Grosvenor's ability to use derivatives as a tool to meet our strategic objectives. Derivatives will increasingly enable us to adjust our economic exposure to real estate between countries and will become an important tool in the asset allocation process undertaken by the Grosvenor holding company."

Property derivatives allow investors to buy or sell exposure to the real estate market rapidly. They also offer a cheap way of acquiring the underlying exposure to property, because participants avoid much of the transaction cost involved in buying and selling property, such as agents' and legal fees.

Philip Ljubic, a trader at ABN AMRO based in London, said: "If the Australian market follows the trends abroad we expect a number of deals to follow in the Australian market this year. As in the UK, trading might be slow to begin with but it will grow as users become comfortable with the property derivative."

Added Scarles: "This is an important first trade for the Australian market and as a long term committed participant in the Australian real estate sector, we will watch the development of the property derivative market with great interest."

Grosvenor is a privately owned international property group, representing the interests of the Grosvenor family headed by the Duke of Westminster. The Group undertakes real estate development and investment on its own behalf and on behalf of partners and investors through its regional operating companies and fund management business in the Americas, Britain and Ireland, Continental Europe and Australia Asia Pacific. It operates from 12 offices and has interests in 17 countries. Grosvenor has total real estate assets under management of USD$21.6 billion (as of year-end 2006). For more information about the Company, please visit the Company Web site at: www.grosvenor.com.

Note to Editors:

All Property Index: The trade was based upon the Property Council/IPD Australian Property Index: All Direct Property Total Return, and is subject to the grant of an appropriate license by IPD to ABN AMRO or Grosvenor.

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