HBC, RioCan form real estate joint venture

Wed Feb 25, 2015 7:25am EST
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TORONTO Feb 25 (Reuters) - Canadian retailer Hudson's Bay and RioCan Real Estate Investment Trust outlined plans on Wednesday to form a joint venture valued at C$2 billion ($1.61 billion) focused on enhancing the value of the retailer's Canadian real estate assets.

The joint venture, which is structured so as to allow for an initial public offering or sale at a future date, will scout for real estate growth opportunities in Canada and allow RioCan and HBC to build on the strength of existing real estate assets.

"This structure will also unlock additional long-term value for HBC shareholders by positioning the joint venture to transition to a more valuable and sustainable publicly traded REIT (real estate investment trust) than HBC could create today," said HBC Chief Executive Richard Baker, in a release.

Under the agreement with RioCan, HBC will contribute 10 owned or ground-leased properties into the new joint venture, including its flagship properties in Vancouver, Calgary, Ottawa, and Montreal.

($1 = 1.2424 Canadian dollars) (Reporting by Euan Rocha Editing by W Simon)