Building commercial opportunities

Several investment banks are hailing commercial property derivatives as the hot new emerging asset class for structured products. Daniel Sheehan looks at what's on offer, and finds that the underlyings currently available might prove unsuitable for retail distribution

In the past two months, ABN Amro, Barclays Capital, Goldman Sachs, Merrill Lynch and Royal Bank of Scotland have all made significant announcements regarding their intentions in the area of commercial property derivatives and structured products. Without doubt, there is growing interest in this market, which has always played second fiddle to residential property-linked investments.

Despite the increase in interest from the banks, however, wider distribution at the retail level is yet to be