Nokia Admits Possible Espoo HQ Sell-Off

Beleaguered Nokia has admitted it is considering selling off its headquarters building in Espoo, Finland, in yet another sign of belt tightening at the former handset titan.

Reports of Nokia’s potential sell off of its spiritual home at Espoo – Finland’s second largest city – first emerged in the Finnish-language publication Helsingen Sanomat. Another newspaper, Ilta-Sanomat, then said that Nokia’s glass and steel headquarters building is valued between 200-300 million euros (£160m to £240m).

Not Moving

Nokia then confirmed the potential sell-off to Reuters, and said it was part of its disposal strategy of non-core assets.

“We are evaluating different options for non-core parts, such as real estate holdings, and that includes the headquarters,” spokeswoman Maija Taimi said.

However, Nokia also revealed that it would not been moving from Espoo, but rather would sell it off and then lease back the same building.

“However, we do not have any plans to move our headquarters,” Nokia was quoted as saying elsewhere in an emailed statement. “As with most companies whose core business is not in owning real estate, it makes common business sense not to tie assets in real estate property but rather invest and focus in its core operations.”

The selling and re-leasing of property in Finland is not an unusual practice in the country.

Painful times

However, there is little doubt that Nokia is hurting. It is currently restructuring and in the process of axing 10,000 of its workforce, as part of its cost cutting scheme to save $2bn (£1.2bn) by the end of 2013.

This restructuring has included dumping non-core assets such as its its luxury handset subsidiary Vertu, which was sold to Swedish private equity firm EQT VI earlier in the year. It has also closed factories across the world, including its complex in Salo, Finland, although research and development efforts will continue at that location.

Nokia also warned in February 4,000 workers would be made redundant as smartphone manufacturing operations are moved to Asia. The brunt of these losses have been borne at Nokia’s factories in Hungary, Finland and Mexico.

Stubborn pricing?

Nokia was once the market leading handset provider, but lost out in recent years to the combined might of Android and Apple.

It has previously warned that the transition to Windows Phone would result in job losses and restructuring, but some shareholders have threatened legal action, accusing the company of lying to investors about the switch.

Nokia had been hoping that its Lumia handset portfolio would transform its fortunes, but so far sales have proved to be modest.

The company has been accused of failing to provide an adequate level of  marketing support to mobile operators for the Nokia/Microsoft smartphone push. And despite the fact that new Lumia models are on the way, Nokia so far stubbornly refuses to discount the prices of its outgoing Lumia handsets.

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