The nascent US property derivatives market is expected to attract much more interest from US and foreign investors following a recent ruling by the US Internal Revenue Service that reduces taxes paid on such investments.

The IRS decision “opens up the industry dramatically”, said Philip Barker, senior vice-president at GFI Group in New York. GFI, a derivatives brokerage firm, which has teamed up with CB Richard Ellis in the US and the UK to help develop the property derivatives market in both countries.