(Bloomberg) — Singapore investors are snapping up Japanese real estate, lured by a weaker yen and the prospect of tourism-driven growth in the second-largest metropolitan area Osaka.

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International property agent FM Investment said it’s seen a fivefold increase in inquiries since Japan opened its borders in October, with Singapore making up about 70% of 800 requests between April and June alone, followed by Hong Kong. Second-quarter sales are double the volume of the whole of last year.

The yen has fallen about 8% against the Singapore and Hong Kong dollar this year, increasing the purchasing power of property investors seeking bargains outside two of the most-expensive markets in the Asia-Pacific region. Agents say buyers are particularly attracted to Osaka, where the next World Expo will be hosted in 2025 and a multibillion casino resort is scheduled to open in 2029.

“The coming integrated resort is a real game changer,” said Jason Lam, co-founder and managing director of Japan Hana Real Estate, which has offices in Hong Kong, Tokyo and Osaka. He said sales have doubled since Japan reopened to tourists last October and inquiries from Singapore have tripled.

The World Expo, an international event held every five years, and the casino resort are expected to boost tourism and are fueling demand for residential units and tourist accommodation, Lam added.

MGM Resorts International is partnering with Japanese financial services firm Orix Corp. on the project, which will feature hotels, entertainment and conference centers and compete with Asian neighbors such as Macau, South Korea and Singapore for customers.

Osaka city authorities estimate it could attract 20 million visitors a year, helping Japan hit a long-term target of attracting 60 million annual foreign tourists by 2030, Bloomberg Intelligence analyst Angela Hanlee said.

Wendell Wong, who owns a Singapore-based fine wine business, bought a 14-story bed and breakfast hotel at an “attractive price” in Shinsaibashi, a major shopping area in Osaka, in May. He says he plans to lease the building to another bed and breakfast operator at a rental yield of 10%, compared with the 6% he’s getting under a contract drawn up during the pandemic.

“Tokyo property prices have been overrated and much more costly than Osaka” and operating bed and breakfast accommodation is less restrictive in the smaller city, added Wong. He said he plans to build on land he owns in Namba, a commercial and entertainment district in southern Osaka.

Based on stabilized trading for a managed asset in a prime location, hotel yields in Osaka average 4%-4.5%, compared with 3.5%-4% in Tokyo, and 4%-5% in New York, Hong Kong and London, according to Jones Lang LaSalle Inc.

Aside from tourist accommodation, foreign investors are also buying residential property in Osaka, which has a high occupancy rate and stable rental income, said Koji Naito, a research director for Japan capital markets at Jones Lang LaSalle. Inquiries about rental housing in Osaka from overseas buyers in the first half of this year are 3.5 times higher than the same period last year.

“When home prices in Hong Kong and Singapore are so high now, Japan is the next Asian country with a sound legal system” for buyers to consider, said Amous Lee, chief executive officer of FM Investment.

Foreign investors poured 268.7 billion yen ($1.9 billion) into Japanese real estate in the first quarter of the year, more than double the same period in 2022, according to a Jones Lang LaSalle report. Osaka made up 18% of total investment, including foreign and local, in the first quarter, up from 13% a year earlier. The largest investment remained in Tokyo’s central five wards at 36%.

Mark Phooi, a Singaporean entrepreneur in the design industry, recently bought two $2.5 million buildings in Osaka as he looks for passive income from rental leasing. On top of that, he predicts more return on his investment if the yen strengthens by the time he plans to sell the properties in three to four years.

But it’s not just about the returns, he said. “I also enjoy the culture and life in Japan,” said Phooi.

–With assistance from Krystal Chia, Shawna Kwan and Lisa Du.

(Updates with comments from FM Investment CEO)

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