Ailing mobile phone firm to offload Nokia House in Espoo for €170m but will stay on as tenant in drive to slash costs

Nokia is selling its Finnish headquarters for €170m (£137m) and leasing the property back on a long-term deal.

The struggling mobile phone company has operated in the glass and steel building in Espoo near Helsinki, known as Nokia House, since 1997. The sale is another step towards reducing costs and concentrating on its core business.

Nokia has spent almost a third of its cash reserves in 12 months, and in October had about €3.6bn left in the bank to turn itself into a smartphone manufacturer capable of competing with Apple and Samsung.

According to Gartner, the market researcher, Nokia slipped to seventh in smartphone sales in the third quarter from third in the previous quarter.

The company has pinned its hopes on the new Lumia 920 and 820 series of smartphones, which run the latest version of Windows Phone software. They have been on sale in the UK for about a month as the company targets the Christmas gift market. "The holiday shopping period will be crucial for Nokia", said a Saxo Banque trader.

Nokia, a former leader of the mobile market, has lost almost 90% of its stock market value since Apple introduced the iPhone in 2007. Six successive quarters of losses since adopting Microsoft's Windows phone software have led it to announce 10,000 job cuts. Nokia plans to save €1.6bn by the end of 2013.

To reach its goal, the mobile telecoms equipment maker Nokia Siemens Networks (NSN) said it was selling its optical-fibre networks unit to Marlin Equity Partners. The joint venture between Nokia and the German industrial group Siemens has been a drain on profits for its owners and is undergoing a massive restructuring.