Barclays Capital plans to launch a property index certificate at the end of next month. The certificate will be jointly marketed by Protego Real Estate Investors and will offer both income and capital return based on the Investment Property Databank Annual Index.
The product is structured as a swap between life insurance companies and Barclays. In the swap, the life funds pay the rental income component of the index and receive a LIBOR spread. The swap is then wrapped as a Eurobond. The certificate has a maturity of four years and three months.
The minimum investment is GBP50,000 (USD92,753) and it will be marketed to institutional investors, according to Paul Coleman, director in solution sales at Barclays Capital in London. "There has been a lot of interest from private banks," said Coleman, who added the bond could also appeal to high-net-worth clients. Barclays Capital expects to sell around GBP100 million of the bond. Coleman said the bank will look to repeat the product next year.
