The Investment Property Databank (IPD) is asking for support from Singapore property fund managers to develop a national index. IPD is a global provider for real estate investment indices.
“An IPD Singapore Index would bring an internationally recognised property benchmark to the regional property sector, enhancing market transparency . . . and would, for the first time, facilitate property derivatives trading in Singapore,” IPD states.
Since the first quarter of this year, IPD has been collating available data publicly. This is to define the returns from the local real estate market last year. However, due to insufficient data, it is inviting property fund managers to provide more accurate and specific information on their portfolios. This intent has been expressed in their letters to managers to gain their support and begin planning the steps that are required to make the index.
IPD Director and Head of Asia-Pacific Kevin Swaddle says, “With the cooperation of the Singapore property market, IPD is confident it could produce the first definitive set of returns for 2007.”
He also cited Trade and Industry Minister Lim Hng Kiang who said in a speech last year, “A key criterion to develop the property derivative market in Singapore would be the existence of transparent, reliable and well-followed direct property indices, which serve as reference points or benchmarks for structuring of property derivative products.”
Doctor Swaddle believes that this proposed IPD Singapore index will measure not just the change in property values, but also the return on capital employed in each period. Thus, with these changes, the index will be different from price indices that are already available in Singapore.