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Ivanhoé, Madison recapitalize retail partnership

The two parties, along with an unnamed US pension plan, together bought a 24 percent stake for a total of $533 million.

HBS Global Properties, the real estate joint venture between Hudson’s Bay Company and Simon Property, sold a 24 percent stake in the partnership that previously belonged to Hudson’s Bay Company.

Three new investors stepped in to divide the stake. Ivanhoé Cambridge, the real estate investment subsidiary of Canadian pension plan Caisse de dépôt et placement du Québec, bought an 11 percent stake for $250 million; Madison International Realty, a New York-based investment firm, purchased a 7 percent stake for $150 million; and an undisclosed “large US pension” bought a 6 percent stake for $133 million.

Simon Property Group retained its 13 percent stake in HBS, and said it committed $100 million for tenant improvements.

The HBS portfolio consists of 83 retail properties totaling 17.8 million square feet in the US and Germany. All of the properties are fully leased with 20-year terms, according to a statement from the joint venture. In the US, the partnership owns 42 department stores, which consist of 30 Lord & Taylor locations and 12 Saks Fifth Avenue stores.

Last month, HBS bought 41 GALERIA Kaufhof properties from Metro Group in a transaction valued at €2.6 billion. This latest equity investment values the entire portfolio at $4.5 billion.