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Commercialbank has recently hosted a seminar for its institutional clients discussing the opportunities to invest in global real estate primarily targeting the institutional clients.

The seminar was held at the Four Seasons Hotel in the presence of financial and business experts. The objective of the seminar was to introduce the clients and apprise them of the various real estate investment opportunities in the United Kingdom and Europe.

While addressing the audience, Mr. Salman Al Mohannadi, Sr. AGM & Deputy Chief Corporate Banking Officer said, "Commercialbank is proud to undertake these seminars as part of its role to provide a better insight of market developments and to allow industry specialists to share ideas with the investors. Commercialbank is committed to providing its customers the knowledge of the best opportunities for them to invest in different countries."

As part of this initiative, Commercialbank regularly brings in international expertise from across the globe to discuss such ideas. Given the recent developments in the global property markets, Commericalbank wanted to provide its customers with innovative ways to access the property market. To this end, Commercialbank invited Mr. Benoit Pinguet, Vice President Property Derivatives from Morgan Stanley which is amongst the leading global investment banks to talk about property derivatives.

In his presentation, Mr. Pinguet defined Property Derivatives, "as an alternative to investing in physical real estate. It is found to provide a very efficient way to take investment bets in real estate as they reduce the cost associated with direct investment in (or divestment of) physical property after accounting for stamp duty land tax, agents' fees, survey fees, legal costs and land registration fees which can easily cost between 6% to 8% of the property value depending on the jurisdiction.

Also, property derivatives reduce the time associated with transacting physically. The parties can buy or sell a very specific exposure into various property sectors using property derivatives. Property derivatives provides shorting to investors allowing them to gain from the decline in price of properties, which is impossible with physical investment."

Morgan Stanley believes the size of property derivatives will outpace the physical real estate markets particularly in United Kingdom in 2008. In 1st Quarter 2008, property derivatives traded on the UK International Property Derivative Index (IPD) was GBP3.4 billion. The UK IPD covers 60% of the UK real estate market. Increasingly, the property derivatives market is expanding to other Euroland (eg Netherlands, France, Germany, Sweden), Japan, Australia and United States of America.

"Parties can diversify and expand real estate exposure by buying French Offices and selling UK All Property for a 10-year maturity. Instantly, the portfolio can be hedged cross-border and cross-sectorally," suggested Mr. Pinguet as he was concluding his presentation.

The seminar was followed by a robust question and answer session which reflected the interest of the attendees in such seminars.

Commercialbank offers a wide array of wealth management solutions including Structured Products, Mutual Funds (including Al Waseela Funds) and Alternative Investments (specifically targeting Real Estate, Hedge Funds and Private Equity). The bank also offers brokerage access to foreign and local institutional clients as well as high net worth individuals to access the Doha Securities Market, GCC equities markets and other international bourses.

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