Building the non-rail group: station buildings, property, retail, care (1996)

A trade to keep the railway running

The decisions of this decade were not attempts to improve the railway’s own accounts. They took the deficit as given and answered a different question: where to create the other profit that could carry it. The place chosen for the answer was the floors above the stations, the housing land along the lines, and services for the people living there. Move the kiosks into a subsidiary, set up the station-building operator before the building itself, buy a contractor, enter nursing care — each is a small piece of paperwork, but lined up they trace a railway company moving into the local property business. That the search for income of its own began at the moment it became clear that the given income, the fund’s investment return, was thinning tells you the character of management in this period.

What was replaced, though, was the source of the profit, not the condition of the railway. In the year to March 2016 the transport segment posted an operating loss of $96.5M (¥11bn): twenty-nine years after founding, the railway alone still did not turn a profit. The more the station buildings earn, the more the company can carry on without the railway earning. That structure works in favour of keeping the network intact, and weakens any motive to confront the railway’s accounts head-on. The company that hived off its station kiosks in 1996 stands, a quarter of a century later, competing for retail catchment with Izutsuya and Yamakataya — and still holding loss-making local lines.