LONDON, May 8 (Reuters) - Eurex has struck its biggest-ever property derivative trade, a sign that some investors still have faith in the flagging property swaps market as a means to adjust exposure to illiquid bricks and mortar assets.
A spokesman for the derivatives exchange told Reuters on Friday that it had traded a contract worth a nominal 5 million pounds ($7.5 million) on the projected return of the Investment Property Databank UK Annual All Property index to Dec. 31, 2010.
The trade was struck at a price of 102.75 over a par of 100 and more than trebles the total outstanding interest of property derivatives contracts traded by Eurex to 6.8 million pounds since it branched into the sector in February.
News of the deal will provide a much-needed fillip to supporters of Europe's nascent property derivatives market, which is still reeling from one of its worst first-quarter trading volumes on record.
Earlier this month, index provider Investment Property Databank said European property derivatives trading volumes sunk to 606 million pounds in the first three months of 2009, a sixth of the amount traded in the same period last year.
Eurex, a unit of Deutsche Boerse, is one of the world's largest marketplaces for fixed income and stock index futures.

($1=.6645 Pound)

(Reporting by Sinead Cruise; editing by Karen Foster)

((See www.reutersrealestate.com for the global service for real estate professionals from Reuters)) Keywords: EUREX PROPERTY/ (sinead.cruise@thomsonreuters.com; +44 (0)207 542 5154; Reuters Messaging: sinead.cruise.reuters.com@reuters.net)

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