Nokia mulls sale of Espoo HQ sale for possible leaseback arrangement

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Helsingin Sanomat reported this morning that Nokia is investigating selling it Espoo headquarters offices as part of its global cost savings program. However, the company is not planning to move its global headquarters away from Finland; and the most likely scenario is that the company would not move from its current site, but instead enter into a leaseback arrangement with a dedicated office services company.

A leaseback arrangement would see Nokia selling its Espoo office, known as Nokia House, but at the same time entering into a long-term agreement to lease (rent) the property at an agreed rate.

For Nokia there would be two advantages. Firstly it would raise capital in the short term, perhaps as much as €300 million, which given the company's current financial position would be beneficial. Moreover money tied up in real-estate is effectively unavailable for investment into core business activities. Secondly the company would no longer be directly responsible for maintaining the building, and therefore the overhead costs associated with the office would be more predictable over the long term. 

Nokia House

Ask for comment a Nokia spokesperson said:

"Nokia evaluating different options for non-core parts, such as real estate holdings, and that includes the headquarters. 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."

Source / Credit: Helsingin Sanomat