Nokia looking to sell off headquarters, and lease them back

Nokia looking to sell off headquarters, and lease them back

Summary: Nokia is turning the cost-cutting scrutiny on its real estate - one option under consideration is offloading its corporate HQ and then renting the facility.

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TOPICS: Nokia
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Cash-strapped Nokia is looking to offload its corporate headquarters in Espoo, Finland - but it has no plans to leave the building. 

The company confirmed it is considering selling the facility near the Finnish capital of Helsinki with a view to then leasing it back.

"We said during our Q2 results in July that we're re-evaluating all non-core operations, including real estate. That said, we don’t have any plans to move our headquarters," Nokia said in an official statement sent to ZDNet.

The sale of its headquarters is just one real estate option Nokia is considering, Nokia's chief financial officer Timo Ihamuotila told Finnish newspaper Telsingin Sanomat.

nokia-head-office-espoo-finland
Nokia's HQ in Espoo, Finland. Image: Nokia

The estimated value of the property, nearby the capital Helsinki, is around €200m to €300m, according to Finnish tabloid Ilta Sanomat.

Cash from the sale of the property would be small in comparison to its more aggressive plan to cut operating expenses by €3bn by the end of 2013, including through the closure of manufacturing at Nokia's Salo facility. 

Nokia has committed to a headcount reduction of 10,000 globally and is also thinning out R&D and manufacturing facilities in Europe and North America.

In August Nokia moved its Central and Eastern European headquarters from Vienna, Austria to Budapest, Hungary as part of a regional realignment associated with the cost-cutting strategy.   

Nokia last month took the wraps off its forthcoming Windows Phone 8 devices, the Lumia 920 and 820. The pair are the second wave of devices to bear the Lumia brand and run Microsoft's mobile operating system.

In an interview with All Things Digital, Nokia CEO Stephen Elop said he believed there was room for improvement with the launch of the first Lumia devices. "In getting the first Lumia devices out there, I would have liked to have done better," he told the publication. "There is no question."

Topic: Nokia

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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7 comments
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  • Selling your HQ is not about cost cutting

    It is about raising capital.

    The HQ is probably worth a tad more with Nokia as a paying (anchor) tenant, than as an empty asset in a bankruptcy sale, but I cannot see the premium being very large, given Nokia's current financial and market position.
    D.T.Long
    • This is obviously about cost cutting, not raising capitol

      but you likely don't understand real estate, so your bias takes over when knowledge is absence.
      William Farrel
      • Well in that case, enlighten me

        Please explain how going from paying maintenance and taxes only (assuming the property is clear title) to paying rent to a landlord (which by necessity will include maintenance, taxes AND return on investment), will cut costs - since you allegedly do understand real estate.

        The only time (other than a need for capital) corporations sell their real estate is when they can earn a greater return on that capital elsewhere. There could of course be complicated tax reasons of which I am not aware, but that is not cost cutting either.

        Your turn
        D.T.Long
  • It's called liqudation

    Where the top brass stashes as much money as they can before filing bankruptcy. This way when Microsoft purchases Nokia for, say $30 million, the top management positions have the option to retire, rather than reporting to Ballmer. Elop will more than likely go back to his old job with Microsoft, and just get a big bonus.
    Troll Hunter J
    • Nice try at the troll, but you fail yet again.

      dude, you're laughed at, not with.

      :D
      William Farrel
      • New record?

        Two pathetic, ignorant, factless, baseless posts one minute apart. Nice going.
        D.T.Long
  • CapEx vs OpEx

    It's not about cutting costs, but about trying to improve their cashflow situation. Owning the building means capital expenditure tied up in the ownership that cannot be used for anything else--at best, they get to depreciate the value of the buildings over time.

    Whereas lease payments are operational expenditure, and can be claimed back on taxable income immediately.
    ldo17