BlackBerry offloads Canadian real estate

Struggling device maker BlackBerry intends to sell the majority of its real estate in Canada.  The firm has teamed up with commercial real estate services provider CBRE Limited to strategically divest its  portfolio.

It intends to lease back certain properties and sell off vacant buildings in a bid to save money necessary to turn the business around. BlackBerry’s real estate holdings in Canada cover three million square feet.

“BlackBerry remains committed to being headquartered in Waterloo and having a strong presence in Canada along with other global hubs,” said BlackBerry CEO and executive chair, John Chen.

“This initiative will further enhance BlackBerry’s financial flexibility, and will provide additional resources to support our operations as our business continues to evolve.”

BlackBerry’s scenario is reminiscent to that in which Nokia found itself in December 2012, prior to the sale of its handset business in September last year. As a sign of the struggles the Finnish firm was facing in the handset space, it agreed to sell and lease back its head office in Espoo, Finland, claiming that “owning real estate is not part of Nokia’s core business”.

The firm said it received €170m for its headquarters from real estate private equity group Exilion Capital Oy.

Earlier this month, David McQueen, principal analyst with Informa Telecoms & Media, said that there are signs that BlackBerry could also end up selling off its handset division. He stated that current CEO Chen has a business software background and replaced Thorsten Heins, who has a hardware background.

“When you look at BlackBerry’s financial performance, revenues are quite high on the hardware side of the business but the profit is coming from services, and that is where it needs to play.

“It does seem like this change in direction will be pushed through by the new appointments and it’s likely to be only a matter of time before it sells off the hardware business, just like Nokia has done,” he said.

BlackBerry would not comment on the potential value of its property and said further information will be divulged as required in connection with any definitive sale transaction.