Osaka Metro looks to Yumeshima IR for future revenue growth

The newly-privatized Osaka Metro, which operates the local subway system, sees the development of non-railway income, especially from Yumeshima, as the key driver for future revenue growth.

Osaka Metro announced this month that it expected to see its operating income from its non-railway investments expand dramatically coincident with the anticipated opening of the IR on Yumeshima in 2024. They project a doubling of non-railway operating income of JPY80 billion (about $727 million) in the 2018-2024 seven-year period to JPY160 billion (about $1.5 billion) in the seven-year period from 2025.

The lion’s share of this hoped-for boost in non-railway revenues is meant to be derived from the 250-meter tall, JPY100 billion (about $910 million) Yumeshima Station Tower—hosting hotels, entertainment facilities, and business offices—that the company is planning to construct by 2024.

President Hideaki Kawai commented, “Although the concrete revenue figures cannot be known until the tower development is completed, at this point the operating revenues of the non-railway segment look set to nearly double, and this segment will make up a larger portion of our overall revenues as well.”

Kawai warned, however, that if by some chance Osaka does not gain an IR license, these development plans cannot go forward.

The diversification of Osaka Metro’s revenues is made more urgent by the fact that the mainstay railway segment itself is thought to be facing an inevitable reduction in revenues as a result of Japan’s decline in population.