Published November 18, 2008

S'pore property fund index in the works

Compiler seeking more data from portfolio managers


(SINGAPORE) The Investment Property Databank (IPD), a global provider of real estate investment indices, is calling for more support from property fund managers in Singapore to develop a national index.

'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,' said IPD yesterday.

IPD has been compiling publicly available data since the first quarter of this year to determine returns from the local real estate sector last year. But because data is incomplete, it is urging property fund managers to provide more specific information on their portfolios. IPD has written to the managers to garner support and outline the steps required to create the index.

'With the cooperation of the Singapore property market, IPD is confident it could produce the first definitive set of returns for 2007 early (next year),' said IPD director and head of Asia-Pacific Kevin Swaddle.

According to Dr Swaddle, the proposed IPD Singapore Index will measure the return on capital employed in each period, not just the change in property values. This makes the index different from price indices already available in Singapore.

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.'