The property for sale in Japan market has seen a decent rebound from the lows of 2003 although the future looks uncertain.

Neptune's Chris Taylor manages the firm's Japan Opportunities fund, and holds a mixture of older and newer firms on his portfolio. One example of a newer firm in the sector is Kenedix which was founded in the 1990s and conducts development, ownership and asset management.

"The sector is divided into the classic real estate developers, with firms like Sumitomo having books extending back to 1949," he says. "The newer firms, including Reits, are a much more recent venture."

The Japanese Reit market emerged in 2001 and since then the country's property sector has been transformed, Taylor says.

He explains that rental yields in Tokyo have increased in recent years after a change in zoning rules led to an average 30% increase in the number of floors in the city's buildings.

"The effect rippled out from Tokyo," he says. "It has had a knock-on effect on the residential market, and has meant everyone wanted to get into the game. Property prices were not going to go down any more."

The sector's performance year to date has been odd, says Taylor, with Reits underperforming relative to traditional real estate developers such as Mitsubishi Estate. As a result, he is uncertain about predicting future performance of the sector for next year.

Companies in Taylor's portfolio are Kenedix and Pacific Management, and Mitsubishi Estate, which each account for around 2% of the fund.