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Sony sells New York headquarters for $1.1b

BusinessNews
by Rawiya Kameir
, 18 Jan 2013News
Sony sells New York headquarters for $1.1b

Sony has announced that it is selling its New York headquarters to investors led by the Chetrit Group, with news of the $1.1 billion (£660 million) sale giving the company’s stock its biggest gain in four years, Bloomberg has reported.

“Given the opportunities and challenges in the current economic and real estate landscape, selling 550 Madison now is a timely and logical strategic move,” Nicole Seligman, president of Sony America, said in a statement. “Regarding our new headquarters, we continue to look at a number of spaces in Manhattan but have not yet made a decision about where to lease.”

According to the statement, Sony will net $770 million (£482 million) in proceeds and $685 million (£429 million) in operating income from the sale, which will be finalised in March as the fiscal year comes to a close. The building will remain home to several units of the Japanese company’s business, including Sony Music Entertainment, for up to three years.

Following four consecutive years of losses, Sony has been selling off assets and slashing jobs in a company-wide bid to reverse its fortunes. Additional income secured from the sale will surely be a welcome outcome as the company attempts to claw its way back towards profitability.

“[The sale] makes sense for Sony, as it’s no longer a cash-rich company,” said Keita Wakabayashi, an analyst at Mito Securities Co. in Tokyo, told Bloomberg. “What matters is whether the company can use these proceeds to develop more attractive products.”

At last week’s CES, Sony unveiled a rash of new products, including the Xperia Z, its new flagship handset, designed to help it compete more effectively in arenas that have come to be dominated by rivals like Samsung.

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