Hudson’s Bay Company (HBC) and RioCan Real Estate Investment Trust have reportedly reached a deal to sell HBC’s flagship store in downtown Vancouver.
According to Reuters, an Asian buyer that “owns a closely held real estate company” has signed a conditional agreement to buy the 1927-built, six-storey building, spanning almost an entire city block with a floor area of 650,000 sq. ft. It is one of the largest buildings in the city.
The value of the deal is said to be about $675 million.
The name and nationality of the buyer was not disclosed in the report, but the deal is expected to be finalized next month. The buyer is said to be seeking to arrange interim financing from at least one Canadian lender.
Last fall, HBC announced it had made a decision to sell its Vancouver flagship store as part of the company’s reevaluation of its real estate assets. This new strategy, which includes the $1.075-billion sale of its Lord & Taylor New York City flagship store, is in response to its depressed stock price and poor financial results over the last few years amidst an increasingly difficult and competitive retail climate.
And earlier this year, a brochure sent to potential buyers highlighted the possibility of adding more density to the Vancouver store building through a rezoning. A mixed-use redevelopment that retains the exterior’s cream terra cotta facade and Corinthian columns is possible, while adding new floor plates on top of the building to create new residential and office spaces.
Examples of redevelopments that retain a heritage base and add new floors include the Old Stock Exchange redevelopment and Amazon’s new office at the old Canada Post building.
HBC stipulated that developers must protect the heritage elements of the building and views of the mountains, skyline, and water.
The HBC store will remain at the location and will continue to lease back the property while using the first four floors while the top two floors of the existing building will be leased to co-working office space company WeWork as part of the aforementioned Lord & Taylor deal.
Malaysia-based TA Global Berhad, the parent company of local developer Holborn Group, would fit the description of the Asian buyer with a “closely held real estate company.”
Holborn Group is known for a number of major developments in the city, such as Trump International Hotel & Tower Vancouver and the new Little Mountain neighbourhood immediately east of Queen Elizabeth Park.
Moreover, Holborn Group also owns the Bay parkade, spanning nearly an entire city block immediately adjacent to the store building across Seymour Street, and the developer has previously said it has major redevelopment plans for the parkade.
An acquisition of the store building could potentially allow Holborn Group to pursue greater synergies with a more ambitious redevelopment for both sites or at least the parkade site through a density transfer from the store building.
In a previous interview with Daily Hive, Holborn Group CEO Joo Kim Tiah said he envisions a “big city” redevelopment for the parkade site on the scale and scope of what you would see in some of the world’s largest cities. He also hinted his interest with incorporating the store building into the redevelopment.
“We would like to continue the connectivity with Hudson’s Bay and Pacific Centre, which are all connected by underground paths. I think there’s a big opportunity,” he said. “There’s also the sky bridge across, and we can do something even nicer and make it interesting so that it connects two buildings.”
“We can do something really cool there. I want to have all these ideas of doing something really cool on this site… There is so much potential. You need to have office, [and] you need to have residential so that your development isn’t quiet at night when the office workers leave. But if you have residential, retail, office, and all that other activity and the place is vibrant all the time, this is what we want. That’s how it’s going to serve like an anchor to the city.”
Daily Hive reached out to Holborn Group today about whether they are the HBC store building buyer, but a spokesperson said they are unable to provide a comment.