Acquisition of Property

8 July 2015

Japan Residential Investment Company Limited

(the "Company")

Acquisition of Property

Japan Residential Investment Company Limited (AIM: JRIC) is a closed-ended Guernsey incorporated company established to make and hold investments in residential property in Japan. The Company, its subsidiaries and entities in which it has a beneficial interest are referred to collectively as the "Fund".

On 7 July 2015, the Fund acquired Minamisuna 7 Chome Building (the "Property"), a seven story apartment complex located in Koto Ward, Tokyo. The purchase price was ¥488 million (£2.5 million), excluding tax and other acquisition costs, and has an estimated prospective net operating yield of 4.7%. The property was purchased at a 2.4% discount to a recent externally appraised value of ¥500 million (£2.6 million).

The Property is newly constructed completed in November 2014, has 539 square meters of net leasable area, and currently is 95.8% occupied. In addition to 14 residential units, the Property has one retail unit tenanted by Seven Eleven Japan. Built in 2014, the Property fronts Minamisuna Sanchome Park and is in close proximity to schools, shopping, and other lifestyle amenities. The Property is a 3-minute walk from Minamisunamachi Station, on the Tokyo Metro Tozai subway line.

In conjunction with this acquisition, the Fund today obtained additional debt financing in the amount of ¥318 million (£1.7 million). This loan has been extended by licensed lending businesses in Japan that are affiliates of U.S.-based Prudential Financial, Inc. (NYSE: PRU). The debt has a fixed interest rate of 1.25% per annum, a loan-to-value ("LTV") ratio of 63.6%, and a remaining tenor of 5 years and 8 months. The lender is not affiliated in any manner with Prudential plc of the UK.

With this acquisition and this new financing, the Fund will have an aggregate LTV ratio of 57.6%. Gearing (calculated as net debt as a proportion of total assets less cash and restricted reserves) will be approximately 50.7%. The weighted average interest rate of the Fund will be 0.87% and the average maturity on loans outstanding is 3.4 years.

Alec Menikoff, Managing Director, Halifax Asset Management said, "Today's acquisition further demonstrates our ability to rotate capital out of non-core assets and into new acquisitions in a way that enhances overall portfolio quality and shareholder value."

Note: Sterling denominated purchase price value is based on an exchange rate of ¥192.39/£1.

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