Investment Property Valuation

9 January 2014

Japan Residential Investment Company Limited

("the Company")

Investment Property Valuation

Japan Residential Investment Company Limited (AIM: JRIC) is a closed-ended Guernsey registered 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".

The Fund portfolio was externally valued at ¥34,120 million (£203 million) as at 30 November 2013. In Yen terms, this represents an increase of ¥1,187 million (£7 million) over the portfolio valuation one year prior. Portfolio value reflects - in addition to valuation gains on properties held - the net effect of capital rotation during the year from the sale of four smaller assets and the acquisition in September 2013 of a larger residential asset located in Ota Ward, Tokyo.

On a like-for-like basis, the growth rate increased to 3.0% for investment property held during the year, compared with a 2.6% increase over the same period one year prior. A scarcity of assets and lower yields in Tokyo are pushing investment toward regional markets. While the portfolio registered valuation gains in each of the major regional categories, the largest gains in percentage terms were in Osaka (+3.5%) followed by Tokyo (+3.2%), Nagoya (+2.8%), and Other (+2.1%).

The unleveraged net yield of the portfolio (appraised net operating income over value) ended at 5.57% as at 30 November 2013, down from 5.77% at the same time one year prior.

Portfolio valuation trend by region (like-for-like basis):

Note: Sterling values shown above are based on the exchange rate of ¥167.6730/£1 as at 30 November 2013.

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