Refinancing of Debt

19 September 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 18 September 2013, the Fund secured ¥5,300 million (£33.57 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 20 September 2013 - in conjunction with the previously announced purchase of the residential property G-FLAT - subject to the provision of all lender required documentation and execution of related third party agreements. The loans carry a floating interest rate, currently 0.55% per annum. Commencing October 2013, the interest rate will be calculated as a 40bps premium over the 3-month yen TIBOR; based on current market rates this would be equivalent to 0.63% per annum.

In conjunction with this refinancing, the Fund will repay all debt outstanding to Mizuho that is scheduled to mature in September 2014. This debt currently totals ¥3,053m (£19.34 million) and has an interest rate of 1.73%. Net proceeds from this refinancing will be used to fund new property acquisitions.

The loans are secured by 8 properties externally valued at ¥8,714 million (£55.19 million) as at 31 May 2013, for a loan-to-value ("LTV") ratio of 60.8%. Following this repayment, the Company will have an LTV ratio at the Fund level of approximately 60.9% and no further debt maturing until January 2017. Gearing (calculated as net debt as a proportion of total assets less cash and restricted reserves) at the Fund level will be approximately 47.8%. This refinancing reduces the weighted average interest rate of the Fund from 1.17% to 0.93%. The weighted average maturity of outstanding debt is increased from 3.6 years to 4.3 years.

This transaction completes the refinancing of all the Fund's short term debt at much improved terms and creates a solid foundation for the future growth of the Company.

Note: Sterling denominated values are based on an exchange rate of ¥157.89/£1.

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