Icelandair Group hf. has entered into an agreement with Reitir regarding sale of its office building in Reykjavik, Nautholsvegur 50. The sale will take place as of today, 30 December 2020, and Icelandair Group will lease the office building from Reitir for a period of three years, until year-end 2023. The sale price amounts to ISK 2,250 million (USD 17.6 million) which is conditioned upon a sufficient due diligence on the real estate. The sale proceeds will partly be used as a payment of a loan which is mortgaged on the property and to strengthen the liquidity position of the Company.
The sale price is higher than book value of the office building and the expected gain from the sale will be recognized in Q4 2020. However, due to prolonged uncertainty in the tourism industry, some further impairment on such assets in the Company’s balance sheet is expected which will off-set the gain from the sale of the office building. Further information will be provided in Icelandair Group‘s annual financial statements for the year 2020 that will be published on 8 February 2021.
The sale of Nautholsvegur 50 enables Icelandair Group to achieve future cost savings and increase liquidity. Over the next three years, Icelandair intends to build a new office building which will be tailored to needs of the operations and support future flexible working arrangement. The location of the new headquarters will be at Icelandair’s current facilities at Flugvellir in Hafnarfjordur. Combining the operations in Hafnarfjordur and Reykjavik in one location will provide various benefits, improve efficiency and boost employee collaboration.