Madison International Realty Buys Stake in Hudson’s Bay

By Scott Baltic, Contributing Editor

Ronald Dickerman, Madison International Realty

New York—Madison International Realty and affiliates have acquired 1.3 percent of the common stock of retail giant Hudson’s Bay Co., the real estate private equity firm announced Tuesday. The acquisition follows an earlier investment in HBS Global Properties, the joint venture between HBC and Simon Property Group.

Madison did not respond to Commercial Property Executive’s request for additional information.

With the stock’s current price hovering around 17.00 CAD and outstanding shares of HBC totaling about 182.2 million, according to Bloomberg, Madison’s investment presumably cost about 40.1 million CAD, or about 30.4 million USD.

HBC owns and operates, along with the Hudson’s Bay stores, the Saks Fifth Avenue and Lord & Taylor department store chains, as well as, since a giga-purchase last September, German department store chain Galeria Kaufhof, its Belgian subsidiary Galeria INNO and the German Sportarena chain.

“The significant value embedded in Hudson’s Bay’s real estate is clear and the investment across the store network, digital platform, and into complementary brands will serve to optimize margins and profitability as well as further enhance the inherent real estate value, which can be monetized methodically over time,” Andrew Schaffler, Madison’s director of listed real estate securities, said in a prepared statement.

“Similar to successes experienced in Canada, recent investments are already yielding positive results including the upcoming introduction of existing brands in Germany, improving margins in the off-price channel, and corporate synergies,” he added.

Madison’s announcement highlighted Hudson’s Bay’s balance sheet, noting its “limited maturities and extended term well beyond retail peers, allowing for lower sensitivity to economic cycles and ample runway for return on recently and pro-forma invested capital.”

In July, Madison announced the final closing of its latest fund, Madison International Real Estate Liquidity Fund VI LP, with $1.39 billion of equity commitments, exceeding its $950 million target.