Astro Japan Property : AJA Full Year Results – Media Release and Presentation

ASX/Media Release

24 August 2016

AJA FULL YEAR RESULTS - MEDIA RELEASE AND PRESENTATION

Please find attached the following documents relating to Astro Japan Property Group's Full Year Results to 30 June 2016:

1. Media Release

2. Results Presentation

AJA will present its full year results this afternoon at 4.00pm AEST. The results presentation will be hosted by Mr Eric Lucas, Senior Advisor to AJA. Dial-in details for participation in the conference call are on AJA's website, www.astrojapanproperty.com.

ENDS Investor & Media Enquiries:

Eric Lucas John Pettigrew

Senior Advisor Chief Financial Officer

Phone: [phone] (Japan) Phone: [phone]

About Astro Japan Property Group (AJA)

Astro Japan Property Group is a listed property group which invests in the Japan real estate market. It currently holds interests in a portfolio comprising 29 retail, office, residential and hotel properties. Asset management services in Japan are generally undertaken by Spring Investment Co., Ltd.

AJA is a stapled entity comprising Astro Japan Property Trust (ARSN 112 799 854) and Astro Japan Property Group Limited (ABN 25 135 381 663). For further information please visit our website: www.astrojapanproperty.com.

ASX/Media Release

24 August 2016

AJA FULL YEAR RESULTS TO 30 JUNE 2016

• Underlying profit after tax of A$31.5 million, up 17.5% on the prior year primarily as a result of increased net property income and an approximate 11% strengthening of the Japanese Yen

• Earnings per security increased by 28.5% to 51.9 cents

• Statutory net profit after tax of A$132.1 million, compared to A$43.6 million for the prior year

• Year on year increase in the value of ongoing portfolio of approximately 2.5% with the 30 June 2016 portfolio size ¥83.0 billion (A$1.08 billion)

• Distribution of 36.0 cps for the full year in line with guidance, an increase from 28.5 cps in the prior year

• NTA of A$8.26 per security, up 28.3% from A$6.44

Financial results

Astro Japan Property Group (ASX: AJA) today announced an underlying profit after tax of A$31.5 million for the full year ended 30 June 2016, 17.5% higher than the prior year, primarily as a result of an approximate 11% strengthening of the Japanese Yen, increased property income and savings in borrowing costs achieved through refinancings during the prior year. These increases have been partially offset by higher asset management fees (including a performance fee of A$5.1 million).

Underlying profit after tax is a measure which the Directors believe most accurately and consistently reflects the underlying business performance of AJA.

The underlying result for the full year reflects an increase in net property income of 16.7% to A$53.8 million, with 4.7% of the increase due to the consolidation from 1 July 2015 of income from JPTGK which owns a 64% interest in Musashino Towers. On a like for like portfolio basis and excluding currency movements, net property income increased by 4.9%.

Statutory net profit after tax for the full year was A$132.1 million, compared to A$43.6 million in the prior year. The increase is mainly driven by foreign exchange rate gains and an increase in value of the property portfolio.

Distribution for the six months ended 30 June 2016 of 18 cents per stapled security is to be paid on

31 August 2016. The full year distribution of 36.0 cents per security was less than underlying earnings of 51.9 cents per stapled security, with the balance used for capital management purposes.

Portfolio Performance

Portfolio values continue to show a positive trend with an approximately 2.5% or ¥2.0 billion increase in the value of the portfolio for the full year on a like-for-like basis. As at 30 June 2016, AJA's total portfolio value was ¥83.0 billion, following the sale of four assets during the year and the purchase of an additional 12% interest in JPTGK. In Australian dollar terms, the value of the portfolio increased from A$877.5 million at 30 June 2015 to A$1.08 billion at 30 June 2016. This increase in property values continues a rising trend in Japanese asset values. The weighted average capitalisation rate used by the independent valuers for the portfolio at 30 June 2016 has tightened to 5.1% from 5.3% at June 2015.

Portfolio occupancy by area continues to remain high at 99.1% as at 30 June 2016 compared to 97.3% as at 30 June 2015.

Mr Eric Lucas, Senior Advisor to AJA, said, "The continued positive trend in asset values is pleasing, although it still reflects a firming of capitalisation rates more than improvement in actual or expected rental returns. We remain cautious as to how we invest our surplus cash, but are pleased that even in a very strong market we are able to achieve acquisitions such as the hotel purchases announced earlier this week."

Net Tangible Assets

Strengthening of the Japanese Yen was the primary factor in a 28.3% increase in NTA to $8.26 cents per security as at 30 June 2016, along with an increase in the Yen value of the portfolio.

Capital Management

Mr Eric Lucas, Senior Advisor to AJA, said, "Having completed the refinance of all of the portfolio debt on substantially improved terms during the prior fiscal year, our weighted average interest rate has reduced to 1.27% p.a. as at 30 June 2016, and on an annual basis, financing costs were approximately A$1 million or 10% lower than the prior year, with a further saving on annual amortisation payments of approximately A$2.2 million or 52% lower compared to the prior year. The weighted average maturity of AJA's debt is still comfortable at 6.9 years.

AJA currently holds unrestricted cash equivalent to approximately A$45 million, mostly held in Yen, even after setting aside funding for the June 2016 distribution and after settlement of the purchase of the two hotels announced earlier this week."

Post Balance Date Events

On 22 August 2016, AJA announced the acquisition of interests in two hotels for a combined purchase price of ¥1.47 billion (A$19.1 million) held through a new special purpose, property owning Japanese company KTS&S Co., Ltd. (JPKT). These assets have been acquired with new 20 year non- cancellable leases and without debt, using part of AJA's free cash.

Outlook

Focus will continue to be on deployment of cash resources, portfolio optimisation and asset level performance.

Further acquisitions and dispositions continue to be under consideration. Acquisition focus is on longer-term cash flows from younger assets. Dispositions will mainly seek to recycle capital from non- strategic assets to improve portfolio age, quality and long-term portfolio transparency and value.

The recently announced acquisition of two hotels demonstrates the Board's and the asset manager's objective to further diversify income streams and capitalise on Japan's growing tourism sector.

To maintain the highest possible rental outcomes, AJA expects to continue an ongoing program of capital expenditure on the portfolio, forecast at approximately 10 cents per security, fully funded from cash flows.

- J-REIT Investigations

Investigation is ongoing of the previously disclosed possibility of a sale of all or substantially all of AJA's portfolio to a J-REIT or similar vehicle. Although the J-REIT IPO market continues to be active, some recent, smaller issues are trading poorly post IPO.

Directors believe AJA's continued strong liquidity position and both recent and long-term return outperformance vs the A-REIT index dictate that attempting a J-REIT-based liquidity event should be done only with an appropriate level of execution, cost and reputation risks.

Examination of this potential option will continue and updates will be made promptly if there is any substantive development.

- Earnings and Distribution Guidance

Based on a foreign exchange rate of A$1=¥80 and assuming no substantial performance fee to the asset manager, underlying profit after tax for the current fiscal year to 30 June 2017 is expected to increase by approximately 8%-11% to between A$34 million and A$35 million or approximately 56.0 -

58.0 cents per security.

Distribution guidance for the 6 months to 31 December 2016 is 21.0 cents per security, an increase from 18.0 cents per security for the most recent 6 month period.

Ends Investor & Media Enquiries:

Eric Lucas John Pettigrew

Senior Advisor Chief Financial Officer

Phone: [phone] (Japan) Phone: [phone]

About Astro Japan Property Group (AJA)

Astro Japan Property Group is a listed property group which invests in the Japan real estate market. It currently holds interests in a portfolio comprising 29 retail, office, residential and hotel properties. Asset management services in Japan are generally undertaken by Spring Investment Co., Ltd.

AJA is a stapled entity comprising Astro Japan Property Trust (ARSN 112 799 854) and Astro Japan Property Group Limited (ABN 25 135 381 663). For further information please visit our website: www.astrojapanproperty.com.