Sony Corp, the electronics giant will reportedly enter into the real estate business by August this year and go public in the next three years, the company announced Thursday.
The real estate arm of the company will be called Sony Real Estate Co., Ltd. or Sony Real Estate Corporation. It is starting off with a capital of $2.4 million and will be headquartered in Tokyo. The business will offer all property related services like "brokerage, leasing management, property management and consulting on real estate," according to an official statement.
The real estate business is one of the many projects Sony hopes to take on. The idea of property dealing was pitched to Sony's higher officials by a mid-level manager, reports The Wall Street Journal.
Sony said that it will give out more information about the business once it becomes operational. Experts say that the company will probably power its venture through the database it built selling its Vaio and PlayStation products.
News of the new venture comes as Sony is grappling with poor sales of its mobile phone division. With Samsung and Apple Inc. eating up most of the market share, it is struggling to attract customers. Demand for its televisions, PCs and cameras have also been weak.
In its February 2014 fiscal report, Sony announced that its consolidated earnings were revised to a loss of $1.07 billion. The figures account for a third year of consecutive losses for Sony's electronics division, reports Nippon.com.
Since the past two years, Sony has been downsizing on its real estate assets aggressively to collect capital. In January 2013, Sony sold its Madison Avenue building in Manhattan, New York City, for $1.1 billion.
In March 2013, Sony sold its Tokyo building to Nippon Building Fund Inc., for 1.2 billion. At that time, the company said that the decision was a "restructuring effort." The sale was Japan's most expensive office property deal in four years.
Yasuo Nakane, an analyst at Deutsche Bank AG in Tokyo told Bloomberg that Sony's decision to venture into the real estate business seems more like an "asset optimization" move rather than a strategic one.
Sony has the experts' nod in the venture, however.
"The financial and real estate businesses are intricately linked and there isn't a high risk if Sony focuses on the brokerage services," Naoki Fujiwara, a fund manager at Shinkin Asset Management told the Journal.