Sony Looking to Sell Tokyo Building for up to $1.5 Billion
01/10/2013| 07:36am US/Eastern
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--Sony looking to sell one of main buildings in Tokyo to bolster finances, according to person with knowledge of proposed sale
--Person says company considering selling Sony City Osaki building for about Y100 billion to Y130 billion
--Sony has been stepping up shedding of non-essential assets to raise cash
TOKYO--Sony Corp. (>> SONY CORPORATION) is looking to sell one of its main buildings in Tokyo barely two years after it was completed, as the Japanese electronics giant steps up its shedding of nonessential assets to raise cash, a person with knowledge of the proposed sale said Thursday.
The company is considering selling Sony City Osaki building for about 100 billion yen ($1.1 billion) to 130 billion yen ($1.5 billion), the person said. Employees are expected to stay at the location since the potential buyer is likely to lease the building to Sony.
Completed in 2011 and located in one of Tokyo's main office areas, the 124,000 square-meter, 25-story building houses around 5,000 employees in television, audio, and other divisions.
Weakened by years of red ink and a sharp decline of its core consumer-electronics segment, Sony needs to bolster its finances to compete with leaner rivals.
The company has reshaped its business portfolio under Chief Executive Kazuo Hirai, selling off its chemical products business and unwinding a liquid crystal display joint venture with Sharp Corp. (>> Sharp Corporation), while forming a capital tie-up with medical equipment maker Olympus Corp. (>> Olympus Corp). It is also considering selling its rechargeable-battery business, according to people familiar with the company's thinking.
The company declined to comment on whether it will sell Sony City Osaki building. Sony has previously said it is considering selling its U.S. headquarters in New York. The company in 2006 sold its old head office in Tokyo and later its main building in Berlin.
The first talk of Sony looking to sell its Osaki building emerged awhile back with at least one investment fund saying it had been notified about a potential sale about a year ago.
Despite slim prospects for sharp rises in property prices, foreign investor interest in Japanese real estate has been increasing recently especially on the back of attractive annual returns. Office vacancy rates in Tokyo have also started to decline in recent months, according to brokers.
Write to Kosaku Narioka at kosaku.narioka@dowjones.com and Kana Inagaki at kana.inagaki@dowjones.com
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