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41

Nokia considering selling main headquarters in Espoo, Finland

Nokia HQ

Nokia HQ, Espoo, Finland

File this under rumor but it's coming from a notable source, Finland’s own Helsingin Sanomat newspaper. The report states that Nokia is in the process of selling off their main headquarters in Espoo, Finland. The move would be quite shocking to the country as physically the building has come to represent the company in many ways--much like the Chrysler building in New York City years ago.

Nokia did previously mention that selling of property may be a part of company restructuring and cost savings, but selling off of the main building appeared as a last resort. As a business re-organizes the retention of costly properties needs to be put on the table for reconsideration and in fact, leasing of the property could be an option. That means the company won't necessarily move, they'll just be renters instead of owners. The move could invigorate investors but would also demonstrate the severity of on-hand cash for the smartphone maker.

According to ex-Nokian Juha-Pekka Helminen, the building is worth 200-300m€ ($258M to 387M) and could bring in a large inflow of money to the struggling company. The question for many is where would Nokia move to, if anywhere? The paper does not say although previous CEOs of Nokia have noted that moving the company abroad was not an option.

Update: Nokia has confirmed with the Verge that they are considering selling the building but not relocating, lending credence to the "renting but not owning"  idea above.

Source: HS.fi; via @jphelminen

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Reader comments

Nokia considering selling main headquarters in Espoo, Finland

41 Comments

I'm hoping this is just a rumor, seems like Nokia would be selling their own identity by selling off their headquarters and lose who they really are. 
I didn't think Nokia were that bad off, but if this is true it really does show how much they are struggling. 

Ford mortgaged their logo. Sometimes restructuring like this is necessary. Though that usually comes with a change in CEO too or board members or high managers...things need to brighten up quick.

The article is wrong, it cites is sources wrong. In Helsingin Sanomat it states that they are looking to sell their headquarters to then be able to rent it back. This way they free up the capital that's in the building and can then deduct the rent as an expense.

Microsoft doesn't want Nokia's 50,000 or more employees. It's very expensive to layoff employees in Europe. And if Microsoft makes their own phone, they have no reason to buy Nokia.

Agreed, there could be a myriad of reasons but...it's the image, the impression that it gives which will resonate, regardless.

I work for a fortune 500 company. We do not currently own the building where are HQ is at. We will be selling our lease to the building within the next few years to relocate within the same city. It has nothing to do with anything bad happening to the company.
Maybe they want to relocate somewhere closer to within Helsinki?

I remember reading about a year or so ago that Nokia wanted to HQ in the London area. This would be a logical step towards that.

Or maybe that is exactly why they are doing it. With the end of the world in a couple of months, who needs a headquarters? ;P j/k. Ya, I agree. If they do sell, it would definitely save some much needed funds. But, there may be more to this story than we know.

Have to point out that it's quite normal in Finland for the bigger companies to NOT OWN their own HQs, as said in that article. For example Stora Enso and UPM (paper industry giants) neither own their own HQs. Nor does Kone, one of the leading global lift equipment manufacturers. There's the possibility of Nokia leasing the premises from the buyer. 
Rationale behind this is that managing the buildings and premises aren't the core businesses to the companies. Ihamuotila says that there still aren't any plans to move HQ out of Finland. 

Could you please update the article? It is highly misleading. In Helsingin Sanomat as well as in all the other finnish media they're saying that they are simply looking to sell their headquarters to a company that manages housing and then rent it from there.
There are NO rumours of the moving, it's actually stated separately in the HS article that they aren't moving.

If they move out it is not really gonna give em lots of money as they have to move somewhere else which also costs money. Unless they are going to fire lots of workers but it seems like a weird course of action to me. They are not completely broke, and this really is a last resort solution so i'm thinking this is just a rumor

Nokia is moving with technology and relocating to the 'cloud'. Microsoft can offer them a special deal on Skydrive data for it. 

It looks like a great business move to me. If they rent it they will save a lot of $$$!! That means more $$$ for projects, developments & less on repairs for the building,taxes & so on..

With the job cuts announced and now the headquarters in sale, I am pretty much leaning towards Microsoft acquiring Nokia

I'm pretty sure Nokia has an emergency plan Z should the Windows project not work out. I would imagine they're already developing an Android device in time for next year's Christmas market... People like Nokia. Unfortunately, they just don't appear to like Windows and I don't know why...

People don't like Windows because they like believing in FUD and superstition virally spread by Linux and android fanboys.

That might be part of the reason but one that stops my friends from jumping ships is the lack of apps & app support being last or not even getting some of the hottest apps is a big deal. We are last in apps, last to get the latest hardware. Once that changes we could get people to look in to windows phones.

I don't like the sound of this.
While this might be understandable from a financial point of view and while a lot of companies are doing this, it's sad and  disastrous for the home countries and doesn't make the future smell any brighter. 
On a larger scale, i find it downright scary that more and more real estate doesn't belong to countries and their residents anymore. It gives me the impression that Europe (not sure about the situation in the U.S.) is selling itself - to whom, I don't know. I (and people of my age) might not have to live with the consequences of this trend, but our children might.
 
 

The article is wrong, it cites is sources wrong. In Helsingin Sanomat it states that they are looking to sell their headquarters to then be able to rent it back. This way they free up the capital that's in the building and can then deduct the rent as an expense.

I work for the largest bank in the US. A few years ago before the real estate crash, we sold dozens of buildings we owned and now rent them. We were not in any financial troubles. It cuts down on taxes and maintenance. Also it allowed us to easily consolidate lines of business. Financially this move make sense for Nokia, but of course BGR.com will twist this story beyond belief. God I hate that site.

This move will increase revenue, net income, and cashflow. I believe there is clause stating that Nokia has the right to be offered purchase before others. It's most likely leasing in for plane. The lease may be for until the economic benefit expires and what will remain will be residual value. It must be capital lease. It's their headquarter after all.
 
The other benefit of this lease is..gues what ? off balance sheet purchase. I doubt Nokia will dare to do this :)

As a stock holder, I really welcome this news. This may appear as doom and gloom because companies tend to only do it when in trouble. That is if they didn't plan on just leasing from the start.  Leasing has a lot of advantages and it doesn't mean the Nokia name gets removed from the building. 
Circuit City at one point owned many of their large stores and it turned out to be just one contributing factor of their failure.