19 Jan 2013

Madison Avenue HQ sold by Sony

10:11 am on 19 January 2013

Sony selling its US headquarters in Manhattan for $US1.1 billion.

The skyscraper on Madison Avenue will be bought by the Chetrit Group, a family-owned property group in New York.

Sony acknowledged that the motivation for the sale was to raise cash, expected to equal $US770 million, after debts on the building are repaid.

The company will also record a windfall profit in its accounts, as the building is being sold at a gain of £685 million, compared with the price that Sony originally paid for it in 2002.

Sony said that it will lease the building back for another three years following the sale, which is expected to be completed in March.

Sony has 1500 employees in the 37-floor building, which was constructed in 1984, at a time when Sony was in the ascendant due to the success of the Walkman. The company has since fallen back to earth.

On Friday, its shares ended the day in Tokyo at 1149 yen - a fraction of their peak of 16,950 yen at the height of the Japanese stock market bubble in 2000.

Having recorded a loss every year for the last four years, Sony has embarked upon a major restructuring of its business, including the sell-off of its chemicals division, and cutting 10,000 jobs.