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Struggling Sony sells off New York HQ for $1.1bn

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Sony has announced that it will sell off its US headquarters in Manhattan to help raise funds.

The firm is selling its skyscraper on Madison Avenue to the Chetrit Group, a family-owned property consortium, for $1.1bn (£690m).

The Sony Building in New York

© PA Images / Jeff Christensen/AP



Meanwhile, Google has reportedly bought a 2.4 acre plot at the King's Cross Central development scheme and will use it to create its £1bn ($1.6bn) new London headquarters.

Struggling Sony admitted that the motivation for the New York building sale was to raise cash, and the deal is expected to bring in $770m (£485m) after Sony's debts on the building have been repaid.

"Sony is undertaking a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth," Sony said in a statement announcing the sale.

The company added that it was "balancing cash inflows and outflows while working to improve its cash flow by carefully selecting investments, selling assets and strengthening control of working capital such as inventory".

"This sale is made as a part of such initiatives," it added.

Constructed in 1984, when Sony was at the height of its power following the success of the Walkman, the 37-floor skyscraper is now used by around 1,500 Sony employees, mostly in the firm's music and film businesses.

The Sony Building in New York

© PA Images / David Goldman/AP



Sony, which bought the building in 2000, has endured a torrid time in recent years, with its shares currently trading in Tokyo at 1,149 yen (£8/$13), compared to the peak of 16,950 yen (£119/$189) in 2000.

The firm has already announced plans to restructure its business, including the cutting of 10,000 jobs and the sell-off of its chemicals division.

Going in the other direction is Google, as Reuters reports sources as saying that the firm will invest £650m ($1bn) to buy and develop a site at King's Cross Central, and the new one million square foot office space will be worth around £1 billion when it is finished in 2016.

According to Reuters, construction on Google's new London site will begin in late 2013 and the building will range in height from seven to 11 stories.

Google will move from its current London bases at Victoria and Holborn in 2016 when the King's Cross building is completed, the sources said.

"This is a big investment by Google, we're committing further to the UK - where computing and the web were invented," said Matt Brittin, Google vice president for Northern and Central Europe. "It's good news for Google, for London and for the UK."

Based on a former fish, coal and grain goods yard in North London, the Kings Cross Central regeneration area will cover 67 acres of land and contain offices, homes and shops.

Google has previously leased property for its overseas offices, but has in the past two years purchased premises in Paris, Dublin, and also now in London.

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