Japan’s real estate market is going through a slowdown as capital for investment becomes harder to come by, but property fund managers seem to be riding the storm.

Junko Kannami, manager of the asset management division at Morgan McKinley Tokyo, says hiring levels in Tokyo’s property fund management market have remained relatively steady. “While some investment banks have adopted a cautious approach and slowed their hiring, others, such as fund management firms, are still hiring at healthy levels,” says Kannami.

Donald Eddy, manager of corporate finance and real estate at Robert Walters, says only a minority of firms have gone as far as freezing hiring or letting people go. Eddy adds that “Some groups are hiring aggressively to take advantage of their strong position.”

Financial services group Orix is one of the firms expanding its domestic real estate operations. The firm is tripling investments to about ¥300bn this year, to take advantage of Japan’s softening real estate market (Financial Times).

What kind of candidate is in demand? One recruiter, who preferred not to be named, says firms are looking for bilingual candidates, ideally with a US MBA. Kannami says: “There is a large focus on the domestic market so employers are looking for candidates who have good knowledge of the local and wider Japanese property markets.” She adds that high-calibre candidates continue to command increases in basic salary when moving roles.

Glyn Nelson, head of the real estate intelligence service at Jones Lang LaSalle, says despite difficulties in raising financing, the property market is still sound and the long-term outlook is good. “Short term, the Japanese market will need to work through the issues arising from tight lending conditions. This will likely last well in to 2009. When confidence returns to the debt markets and REIT valuations start to look healthy again, Japanese property markets will again look like a great investment destination.”