The number of foreigners working in Japan topped one million for the first time this year, but official data showed that nearly 40 per cent of foreign residents who sought housing in the last five years were turned down at least once as they are not Japanese.

This aversion to foreigners has not put off at least two Singaporean-owned property start-ups from entering the Japanese market.

The start-ups work with property owners to list apartments for medium-term stays of at least one month. This allows them to circumvent recently enacted home-sharing laws in Japan that cap rentals through sites such as Airbnb to 180 days a year.

Singapore start-up MetroResidences, which won a $4 million investment from Japanese e-commerce firm Rakuten in April, is holding a soft launch in Tokyo today.

In Fukuoka in south-west Japan, a national deregulated zone offering various incentives to encourage start-ups, Fukuoka Properties run by Ms Annie Ho, 37, has been providing corporate travellers with a roof over their heads since 2015. It manages more than 200 apartments.

Ms Ho’s firm started out in 2013 by leasing temporary office space, before branching out in 2015 into rental service apartments as the city became more popular among expatriates.

As for MetroResidences, it has about 50 listings now, mainly in the Minato and Shibuya wards that are popular among expatriates. The start-up, which also has $1 million in funds from venture capitalist 500 Start-Ups, does not own apartments but works with mainly domestic private property owners, or asset management firms.

Co-founder Lester Kang, 34, told The Straits Times that the firm is a “disruptor of the traditional property model” adopted by big-name Singapore developers like Fraser and Ascott, which last month launched a lavish serviced apartment property in the Marunouchi business district.

“They are like the five-star hotel to our Holiday Inn – every apartment on our curated platform is comfortable, not of poor quality and offers good value for money,” he said.

The start-up targets junior to mid-level executives, he said, adding: “We strive to be the Amazon of furnished apartments where, on one platform, human resource managers can source an array of apartments for their staff.”

MetroResidences started in Singapore in June 2014, where it manages more than 400 properties that have an average occupancy of over 85 per cent. And Mr Kang, whose company can provide English, Mandarin and Japanese support, expects more expatriates, in line with Tokyo Governor Yuriko Koike’s vision for the city to become a financial centre, and with Tokyo set to host the 2020 Olympics.

He added that Rakuten’s backing has helped to break down barriers.

Rakuten managing executive officer Masatada Kobayashi said in a statement: “With its technical expertise and understanding of the Asian travel market, MetroResidences is on track to develop a strong market share with its unique commitment to providing sharing economy accommodation.”

This article was originally posted on the Straits Times, by Walter Sim.