Nokia Sells Espoo Headquarters in €170M Sale-Leaseback Deal
In a strategic move to bolster its finances, Nokia has announced the sale of its iconic Espoo, Finland headquarters to Finnish real estate firm Exilion for €170 million. The transaction includes a long-term leaseback agreement, allowing Nokia to continue operations in the building while freeing up capital.
Key Details of the Deal
- Buyer: Exilion, a Finland-based property investment company
- Sale Price: €170 million (approximately $222 million at the time)
- Building Size: 48,000 square meters
- Architect: Designed by Pekka Helin
- Expected Completion: By year-end 2012
Why This Move Makes Sense for Nokia
Timo Ihamuotila, Nokia’s CFO, explained the rationale behind the decision:
“Owning real estate is not part of Nokia’s core business. When good opportunities arise, we’re willing to exit these types of non-core assets. We’ll continue operating in our head office building on a long-term basis.”
This sale-leaseback arrangement follows Nokia’s October 2012 announcement that it was exploring real estate sales as part of its broader restructuring efforts.
Nokia’s Financial Challenges
The headquarters sale comes amid significant financial pressures for the former mobile giant:
- Quarterly Losses: €576 million operating loss in Q3 2012
- Declining Cash Reserves: Fell to €3.6 billion from €4.2 billion in June 2012
- Smartphone Sales: Only 2.9 million Windows Phone devices sold in Q3 (down from 4 million in Q2)
Broader Restructuring Efforts
Nokia has implemented several cost-cutting measures as it transitions from Symbian to Windows Phone:
- Factory closures (including its last Finnish handset plant in Salo)
- R&D center shutdowns in Germany and Canada
- Workforce reductions across multiple locations
- Divestment of non-core assets and business units
The company aims to achieve nearly $2 billion in cost savings by year-end through these measures.
About Nokia’s Espoo Headquarters
The distinctive glass-and-steel headquarters building:
- Located in Keilaniemi, Espoo
- Has served as Nokia’s home since 1997
- Represents a landmark of Finnish corporate architecture
While the sale represents a significant moment in Nokia’s history, the leaseback agreement ensures business continuity as the company works to regain its footing in the competitive smartphone market.
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