Landlord takes over 2 Hudson’s Bay stores in Ontario

As the Hudson’s Bay Company winds down, the fate of the soon-to-be vacant stores is being settled.

The company filed for creditor protection on March 7 and later announced all stores would close. Liquidation sales started later in March and are expected to continue until the end of May.

Primaris Real Estate Investment Trust announced it would assume full control of Bay stores in five of its malls.

The real estate company said five of the nine HBC leases in Primaris malls did not receive any bids and they would assume full control of these sites effective June 16.

The five stores are in Cataraqui Town Centre in Kingston, Ont., Place d’Orleans Shopping Centre in Orleans, Ont., Sunridge Mall in Calgary, Medicine Hat Mall and Les Galeries de la Capitale in Quebec City.

Taking over the vacant stores will result in $5.5 million of lower annualized revenue and it will cost approximately $50 million to $60 million to repurpose the stores, Primaris said.

But Primaris said “these properties now offer significant intensification opportunities” for retail or the “potential sale of excess lands for multi-residential, hotel, or other high density uses, and the future expansion of the malls themselves.”

“Regaining control of five of our valuable anchor locations allows Primaris to commence repurposing a significant amount of low productivity space, and marks the beginning of our value surfacing exercise,” said Alex Avery, Primaris chief executive officer in a press release. “While HBC has been the focus of a lot of discussion and attention, the real story is just beginning, as the disclaiming of leases has finally removed obstructionist barriers enabling us to enhance our properties.”

Avery added that there are quantitative and qualitative benefits to regaining control of the spaces.

“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,” said Patrick Sullivan, president and chief operating officer. “There are opportunities where tenants are considering the entire box, others will be subdivided, and others are likely to be demolished to accommodate development of new outparcel and higher density opportunities.”

Leases for another 28 Hudson’s Bay Company stores in Ontario, British Colombia and Alberta will be taken over by Ruby Liu Commercial Investment Corp., a corporation indirectly controlled by B.C. mall owner and billionaire Ruby Liu.

Liu has plans for a space that integrates retail, dining, entertainment and cultural experiences.

Lead photo of Cataraqui Town Centre Hudson Bay store: Google Maps