The Canadian owner of Saks Fifth Avenue said it may spin off its real estate assets in a separate public company.
“We have a tremendously valuable portfolio of real estate, which could be monetized in a variety of ways,” Hudson’s Bay Company Chairman Richard Baker said during an earnings call Wednesday. “What we should have done and what we should be doing as quick as possible is IPO-ing our U.S. real-estate portfolio and/or IPO-ing our Canadian real-estate portfolio.”
Toronto-based Hudson’s Bay bought Saks Inc. in 2013. Two years later it formed joint ventures with retail real estate investment trust Simon Property Group and RioCan Real Estate Investment Trust.
Last year Baker said that Hudson’s real estate portfolio is worth around $4.8 billion, and on Wednesday he claimed the figure is still up-to-date.
Hudson’s Bay has been planning a real estate IPO since at least 2015, but initially wanted to wait for further acquisitions. Now it appears to be in a rush, with interest rates set to rise and the real estate market cycle heading for a downturn.
Hudson’s Bay announced earlier this week that it planned to stack apartments and offices on top of its Fifth Avenue Lord & Taylor store. That renovation is expected to cost more than $250 million.
In February, the company was reportedly in talks to buy Macy’s, which has also explored selling off its considerable real estate assets. [Bloomberg] — Konrad Putzier