Another example of product innovation is in the growth of investment products such as property securities unit trusts and listed property securities funds. A potentially exciting area for innovation is in the property derivatives market. Property derivatives offer the potential for property companies, asset managers, banks and investors to hedge or rebalance their property exposure according to their views on the market. A key criterion to develop the property derivative market in Singapore would be the existence of transparent, reliable and wellfollowed direct property indices, which serve as reference points or benchmarks for structuring of property derivative products. Given the prospects of the Singapore property market, industry players are currently studying the construction of property indices based on the Singapore property market. We are excited to see the introduction of these property indices which would enhance information on Singapore’s property market and provide benchmarks for structuring property derivatives and other innovative investment products. These developments will add to the breadth and depth of Singapore’s markets by providing investing and hedging tools for market participants in a cost-effective and flexible manner. Moreover, they would lead to development of expertise in product structuring as well as real estate portfolio analysis and performance measurement. 2  BIS Review 38/2007  Conclusion So ladies and gentlemen, general positive sentiments suggest that 2007 and the years ahead will be exciting for Asia and its property sector. I am certain that with judicious planning and sound execution, the sector will see strong growth, sustained by liquidity from the capital markets.

Demand for office and retail space is strong. The high hotel occupancy rates have spurred new interest in hotel developments. In private housing, annual take-up of uncompleted residential units has surpassed the previous high in 1994. The Government land sales programme will continue to provide new development opportunities in Singapore. Already, we have seen strong market interest supporting the development of the Marina Bay and Orchard Road areas. With the positive outlook for Singapore and the government’s strategic plans for development of key industries, investments in real estate from foreign investors have substantially increased. Investors in Singapore real estate now come from many countries, namely the U.S., Hong Kong, Australia, Germany, Japan, the Middle East and Indonesia. Singapore as a gateway to property finance Investment opportunities in Asia, including Singapore, have not gone unnoticed by global investors. Property and property-related assets are also gaining popularity with investors seeking high-yielding and predictable returns with exposure to capital gains. Attracted by the region’s rapid economic growth and positive outlook on Asia, global investment funds are increasing their allocation to Asia, specifically in Asian real estate. Singapore can play an important role as a gateway for global investors to access Asian opportunities via our capital markets. As a leading home for global fund managers, total assets under management in Singapore exceed $ billion with over 50% of these funds invested into Asia Pacific. The Singapore Exchange is an established listing venue for regional property companies based in Singapore as well as foreign property developers.