UPDATE TO DISTRIBUTION GUIDANCE FOLLOWING FEDERAL COURT DECISION...

UPDATE TO DISTRIBUTION GUIDANCE FOLLOWING FEDERAL COURT
DECISION IN BAMFORD V COMMISSIONER OF TAXATION

Babcock & Brown Japan Property Trust (ASX: BJT) today announced that
following the Full Federal Court's recent decision in Bamford v Commissioner of
Taxation relating to the taxation of income of trusts, the Trust is reviewing
previous distribution guidance for the current half year.

As previously announced, the Trust anticipated paying a distribution for the 2009
financial year based on forecast taxable income of the Trust. This would have
required a distribution of approximately 10 cents per unit for the current half year
that was expected to be satisfied by way of cash and a pro-rata issue of new
units.

Following the Bamford decision, the Trust’s distribution need not reflect taxable
income. Accordingly, the final distribution will be based upon the Trust's cash
position and therefore will only comprise of cash and not include a pro rata issue
of units. As previously announced the Trust will determine the final distribution
after taking into consideration the ongoing negotiations with its hedging
counterparty and any decisions taken to ensure BJT remains in a sound financial
position.

BJT will announce its estimated distribution for the six month period ending 30 June 2009 on 19 June 2009.