Buying a property company (1955)

Holding two assets that earn in different ways

The 1955 decision was more than a shipping company buying land. A ship generates profit within months when the market rises and bleeds losses at anchor when it falls; a building never suddenly makes money, but the same amount arrives every month for as long as the contract runs. By setting two assets of opposite character side by side on one balance sheet, Iino acquired a structure in which one can keep the company breathing when the other stops. For a shipowner that could not match the six core lines on scale, it was a purchase of stability along an axis other than size.

Yet an asset that produces stability is also an asset that attracts attention. What the 2003 emergence of a foreign investor as largest shareholder demonstrated is that unrealised gains on central Tokyo land, left unreflected in the share price, become in themselves a motive for acquisition. The recent purchases of overseas office buildings look like a decision to thicken the property base while shipping is doing well; but in what proportion to hold two earnings of such different natures — rent and freight — is a question management is still answering.