Hudson's Bay sells €499m stake in global property JV

Hudson's Bay Company (HBC) has cashed in a $533 mln (€499 mln) share of its global property joint venture with US-based Simon Property Group that owns 40 Kaufhof department store properties in Germany.

HBC, one of the oldest companies in Canada, announced on 20 November that it had sold the equity stake in HBS Global Properties to third-party investors. The transaction values HBS Global Properties' portfolio at $4.5 bn.

The new investors in the real estate joint venture are Canada's Ivanhoé Cambridge which has put in $250 mln; US-based Madison International Realty took a $150 mln stake and an unnamed US pension fund invested $133 mln.

HBC will retain a 63% ownership interest in HBS Global Properties as a result of this transaction and following the contribution of Simon Property Group's $100 mln commitment for tenant improvements.

HBC said it will use the proceeds of the sale will be used to cut a $1 bn loan by half.

Richard Baker, executive chairman of HBC, said: 'These transactions further demonstrate the substantial value of our real estate portfolio, and our ability to unlock this value for our shareholders. We look forward to working with our partners to significantly expand and diversify the assets of HBS Global Properties. We believe this will lead to an increase in the value of HBS Global Properties and therefore benefit HBC shareholders.'

As part of the transactions, Ivanhoé Cambridge will be granted representation on the board of directors of HBS Global Properties, raising the total number of board seats from four to five.

Last June HBC agreed to buy Germany’s 135-year old Galeria Kaufhof department store chain and its Belgian unit Immo in a deal valued at over €2.8 bn, including debt. HBC financed the acquisition through the sale of at least 40 of Kaufhof’s owned or partially owned properties to HBS Global Properties for at least €2.4 bn.