Investing ¥143 billion in Tokyo Skytree (2006)

A vast investment, and the question it leaves behind

The decision to commit ¥143 billion alone while carrying ¥810 billion of interest-bearing debt can be read as turning on one thing: that a broadcasting tower, apparently far outside the company’s field, was taken on as urban development in the service of the corridor’s value. It is a case of a railway company converting into its own growth strategy an opportunity where its own asset — the former freight yard at Oshiage — happened to coincide with an external regulatory change, the switch to terrestrial digital broadcasting. That the tower turned a profit in its first year of operation, and that a loss-making leisure business flipped at once into one earning more than ¥10 billion, suggests the judgement landed.

Even so, that success owed much to the boom around the opening. As the trade press itself pointed out, observation decks do not readily generate repeat visitors, and most existing facilities of the kind see admissions peak at opening and decline thereafter. A payback period set at twenty-five years is a figure that reflects the character of family management, which has tolerated very long-dated judgements; but how far that recovery plan has actually progressed remains, more than a decade after the opening, a point that still bears watching.