A Japanese real estate portfolio worth $1.7 billion is up for grabs, with two international companies both in final talks to acquire it.

Singapore's Global Logistic Properties Ltd. and the financial services company Blackstone Group's GIC Real Estate Pte. Ltd are both bidding for LaSalle Investment Management's portfolio of more than 20 industrial properties in Japan used for distribution and warehouses by companies. The sale will be the largest single foreign investment in the country since it was hit by the  earthquake and tsunami in March.

Despite the massive devastation wrought by these natural disasters, Japan remains an attractive option for foreign investors in Asia, with its relatively high residential yields (4.5% to 5% in Tokyo, compared to less than 3% in Hong Kong) and low borrowing costs. They have also been impressed by the resilience of the majority of buildings when the quake struck, and may be tempted to swoop in now that the prices of older buildings are on the decline after the quake.

GLP, which is majority-owned by the Singapore government's sovereign wealth fund, owns several properties in Japan, with a total value of over $6 billion.

Source: The Wall Street Journal