Commercial real estate was, until recently, the only major asset class without a welldeveloped derivatives market. Early attempts to establish such a market were unable to achieve critical mass or trading volume. This brief history, taken from Baum et al. (2006), highlights the main developments that have led to the current market for total return swaps, structured notes and traded futures. As the leading example, the UK property industry has long sought to develop a derivatives product that would facilitate strategic and tactical portfolio management and enable investors to alter their exposure to real estate without incurring high transaction costs or being exposed to public market price volatility. However, attempts were initially hamstrung by complications concerning regulatory requirements and tax treatment and by the nature of the underlying indices.