Retail Property Owner Ruby Liu Inks Deal For 28 Hudson's Bay Leases
Retail Property Owner Ruby Liu Inks Deal For 28 Hudson’s Bay Leases
Vancouver shopping centre owner Weihong Ruby Liu has followed through on her promise to grab part of the iconic Hudson’s Bay department store empire, saying she struck a deal to take over 28 HBC leases in Ontario, Alberta and British Columbia. With the locations secured, Liu says she’ll launch a “new modern department store concept in Canada.”
Liu offered few details about the new concept.
Liu, who owns the Central Walk mall in Vancouver and Mayfair Centre in Victoria, Woodgrove Centre in Nanaimo, and Tsawwassen Mills near Vancouver, attracted attention when she announced she intended to bid on Hudson’s Bay stores after the chain filed for creditor protection in March, citing over $1 billion in debt.
The lease purchases are conditional upon approval by the landlords of the properties where the stores are located and by the Ontario Superior Court of Justice. The location of the stores were not revealed but they are expected to include the three retail outlets in malls that Liu owns in British Columbia.
Before it filed for protection from its creditors, HBC operated 32 stores in Ontario, 16 in British Columbia, 13 in Quebec, 13 in Alberta and two each in Manitoba, Saskatchewan and Nova Scotia. HBC also operated 16 stores as Saks Off 5th and Saks Fifth Avenue under a licensing agreement.
HBC leased most of its stores but also owned a handful of retail properties its stores occupied in a joint venture with RioCan REIT, including prominent downtown standalone structures in Toronto, Montreal and Vancouver.
Not all of the HBC leases attracted offers, as court-appointed bankruptcy monitor Alvarez and Marsal oversaw a bidding process in which 62 Hudson’s Bay leases failed to receive any qualified bids.
Although the closing of the HBC stores represents a loss of rental revenue for shopping centre owners, some landlords have expressed optimism for the future prospects of their centres without HBC as tenants, including Primaris REIT.
Primaris regains some control
Meanwhile, Primaris said this week that five of the nine leases it held with HBC received no bids.
As a result, on June 16, Primaris said it will take control of the HBC-leased properties at Medicine Hat Mall, in Medicine Hat, Alberta; Sunridge Mall in Calgary, and Les Galeries de la Capitale in Quebec City. The real estate investment trust said it will also take control of HBC leases at a pair of shopping centres Primaris owns a half-interest in; including Cataraqui Town Centre in Kingston, Ontario, and Place d’Orleans Shopping Centre in Orleans, Ontario.
The HBC outlets filled over half a million square feet of space, almost one-sixth of the total leasable area of the shopping centres. The two largest were in Calgary and Quebec City, measuring a little over 160,000 square feet each.
The HBC vacancies will cost Primaris $5.5 million in lower annualized revenue and roughly $50 million to $60 million in repurposing fees, the company said. The termination of the leases frees Primaris of its obligation to supply 13 acres of land in parking to HBC, or 1,866 parking spaces, and releases it from no-build restrictions on 71 acres of land, including nine acres filled by HBC stores, the company added.
Primaris President and Chief Operating Officer Patrick Sullivan said this week that some HBC stores could be subdivided and leased to new commercial tenants or even demolished to allow for redevelopment.
“There is strong tenant demand for our HBC boxes, and we are in discussions with strong covenant, high-quality national retailers, including large format tenants,” Sullivan said in a statement.
Source CoStar. Click here for the full story.
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