In an expected move, Nokia once the world’s largest mobile phone maker, has decided to sell off its headquarters situated at Espoo, Finland and re-lease it. The property, popularly known as Nokia House is being sold to a Finland based real estate management company Exillion for an estimated 170 million Euros. Exillion will then lease the property to Nokia as part of a long term deal. Nokia revealed that they are making this move in order to concentrate on their core business.
The arrangement is expected to be completed by the end of 2012 and it is unclear as to how much money Nokia would be able to save by choosing to tread this path.
Announcing the move, Timo Ihamuotila, Nokia’s CFO, said:
“We had a comprehensive sales process with both Finnish and foreign investors and we are very pleased with this outcome. As we have said before, owning real estate is not part of Nokia’s core business and when good opportunities arise we are willing to exit these types of non-core assets. We are naturally continuing to operate in our head office building on a long-term basis.”
The beleaguered phone maker has been in trouble ever since the arrival of the iPhone – followed by devices based on the Android platform. It rapidly lost its dominant position in the smartphones space with the arrival of these two platforms. The move to opt for Microsoft’s Windows Phone platform as a viable alternative to iOS and Android did not meet with much success – although of late, there have been indications of the platform gradually picking up.
All said, the decision to sell and re lease its own property would definitely be seen as a cost cutting move – which in turn reflects the financial state of the company.