By Joyce Teo

A JAPANESE firm operating here is trying to take advantage of a weakening property market by offering to buy an entire block of flats next to an MRT station - and it has up to $100 million to spend.

Tokio Property Services, which usually finds flats for Japanese expats here, is working for a Japanese client that thinks fire-sale bargains will soon be hitting the market. The strong yen also makes it a good time for bargain hunters from Japan.

Mr Toru Takano, who set up Tokio Property Services seven years ago after living here for about eight years, told The Straits Times: 'Prices are going down and some small developers may need to sell their assets.' He added that it would be pointless to wait two to three years for prices to drop if the yen were also to decrease.

Mr Takano placed an advertisement in The Business Times yesterday asking for a block of apartments, as it would be too much trouble calling up the many developers here to locate a seller.

He is looking for a high-yield residential property for investment returns, rather than capital gains for his Japanese client - a well-known firm.

It is possible to find high-yield properties with returns of more than 5 per cent to as much as 8 per cent in a downturn, he said. 'Instead of freehold, I will get a 99-year leasehold (property) that is near an MRT station.' The MRT location will make the flats attractive to tenants who do not drive.

Mr Takano is confident that he will find Japanese tenants easily enough, as there is a large group here. 'Japanese companies do not lay off so many people...even in recession times,' he said.

His plan is to fill the property with Japanese tenants who are happy to pay a premium. He said most rental units here are owned by individual owners and there are many unreasonable landlords who do not take care of their units. 'If the owner is a famous Japanese company, the tenants will feel relaxed and they will not mind paying a little bit more, maybe 10 per cent to 20 per cent higher than the market rate,' added Mr Takano.

His advertisement has attracted a few responses from sellers such as small developers and building owners but none of the offers stood out, he said.

This article was first published in The Straits Times on January 21, 2009.