TORONTO & NEW YORK--(BUSINESS WIRE)--Hudson’s Bay Company (“HBC” or the “Company”) (TSX: HBC) is pleased to announce that it has sold an additional $50 million of its equity in HBS Global Properties, HBC's real estate joint venture with Simon Property Group, to Madison International Realty. Proceeds from the sale will be used to reduce the Company’s borrowings on its Revolving Credit Facility. All amounts are expressed in US dollars.
This equity sale follows the Company’s announcement on November 17, 2015 that it sold $533 million of equity in HBS Global Properties. The total combined third party investment of $583 million values HBS Global Properties’ real estate portfolio at $4.5 billion(1) based on a blended capitalization rate of 5.90%. Madison International Realty has now made a total equity investment of $200 million.
This transaction further demonstrates the third party endorsement of the value of HBC’s real estate venture while reinforcing the high quality nature of the properties that make up HBS Global Properties’ real estate portfolio. HBC will retain an approximate 61% ownership interest in HBS Global Properties as a result of this transaction and following the contribution of Simon Property Group’s $100 million commitment for tenant improvements.
(1) Assumes a EURUSD exchange rate of 1.07
About Hudson’s Bay Company
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to better department stores to off price fashion shopping destinations, with more than 460 stores and 66,000 employees around the world.
In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.
HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.
Forward Looking Statements
Certain statements made in this news release constitute forward-looking statements within the meaning of applicable securities laws, including, without limitation, statements regarding the Company’s intended use of proceeds, statements regarding Simon Property Group’s remaining commitments for tenant improvements and HBC’s pro forma equity interest in HBS Global Properties. The words “may”, “will”, “would”, “should”, “could”, “expects”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “predicts”, “likely” or “potential”, or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. Forward-looking statements are based on current estimates and assumptions made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that it believes are appropriate and reasonable in the current circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct.
Although HBC believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors - many of which are beyond HBC’s control and the effects of which can be difficult to predict – include, among others: (a) the possibility that the anticipated benefits from HBS Global Properties are not realized; (b) the risk that HBS Global Properties will not be able to expand and diversify its assets or effect a future monetization transaction for the benefit of shareholders of HBC; and (c) credit, market, currency, operational, liquidity and funding risks generally, including changes in economic conditions, interest rates or tax rates.
HBC cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause HBC’s actual results to differ from current expectations, please refer to the "Risk Factors" section of HBC’s third quarter Management Discussion & Analysis dated December 10, 2015, as well as HBC’s other public filings, available at www.sedar.com and at www.hbc.com
The forward-looking statements contained in this news release describe HBC’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable securities laws, HBC does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.