HBC JVs With RioCan and Simon Property to Unlock Real Estate Value
RioCan REIT and Hudson’s Bay Co have formed a JV aimed at unlocking the value of HBC’s real estate assets through future redevelopment and acquisitions. HBC will contribute 10 of its owned or ground-leased properties to the venture with RioCan, a 3.3M SF portfolio worth $1.7B, including stores at Yorkdale Shopping Centre, Scarborough Town Centre and Square One Shopping Centre (as well as flagship Hudson's Bay locations in Vancouver, Calgary, Montreal and Ottawa). In the US, HBC announced it is JVing with Simon Property Group to revamp 42 of the Saks Fifth Avenue and Lord & Taylor stores it owns.
In forming the JVs, HBC has created “two tremendous real estate vehicles for growth,” says CEO Richard Baker (pictured with son Jack on a 2010 cross-Canada tour). HBC, which estimates its holdings in both countries are worth $9.2B, expects the JVs to generate $1.1B in revenue. RioCan CEO Edward Sonshine notes the partnership with HBC—to which RioCan will contribute $325M for a 20% stake—is an opportunity to “combine our collective retail real estate acumen” and strong anchor tenant collection to create a “one of a kind real estate portfolio with excellent potential for future urban mixed-use redevelopment.”