Refinancing of Debt

27 August 2013

Japan Residential Investment Company Limited

(the "Company")

Refinancing of Debt

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".

On 26 August 2013, the Fund secured ¥7,260 million (£47.34 million) of debt refinancing in the form of loans from Mizuho Bank, Ltd. ("Mizuho"), Japan's second largest bank by assets. The drawdown of these new 5-year term loans is scheduled for 28 August 2013, subject to the provision of all lender required documentation and execution of related third party agreements. The loans carry a floating interest rate, currently 0.59% per annum. Commencing October 2013, the interest rate will be calculated as a 40bps premium over the 3-month yen TIBOR.

In conjunction with this refinancing, the Fund will repay all debt outstanding to Mizuho Corporate Bank and Mizuho Trust & Banking Corporation scheduled to mature in December 2013 and January 2014 respectively. These loans total ¥5,909m (£38.53 million) and have a blended average interest rate of 2.32%. Net proceeds from this refinancing will be used to fund new property acquisitions.

The loans are secured by 23 properties externally valued at ¥11,381 million (£74.30 million) as at 31 May 2013, for a loan-to-value ("LTV") ratio of 63.8%. Following this repayment, the Company will have an LTV ratio at the Fund level of approximately 56.8% and no further debt maturing until September 2014. Gearing (calculated as net debt as a proportion of total assets less cash and restricted reserves) at the Fund level will be approximately 43.7%. This refinancing reduces the weighted average interest rate of the Fund to 1.17% and increases the weighted average maturity of outstanding debt to 3.7 years.

Alec Menikoff, Managing Director, Halifax Asset Management said, "These refinancing terms have the dual benefit of lowering annual interest expenses while releasing capital for income accretive investments."

Note: Sterling denominated portfolio values as at 31 May 2013 are based on an exchange rate of ¥153.18/£1. Other sterling denominated values are based on an exchange rate of ¥153.36/£1.

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