I solved my own issue. For system properties you need to prefix variables with sys:.
<FastFile name="ALog" fileName="${sys:catalina.home}/logs/test.log" immediateFlush="true" append="true">
<PatternLayout>
<pattern>%d %p %c{1.} [%t] %m%n</pattern>
</PatternLayout>
</FastFile>
Found it after re-reading this part of the documentation:
http://logging.apache.org/log4j/2.x/manual/configuration.html#PropertySubstitution