Toronto-based RioCan Real Estate Investment Trust has released an official statement following the March 2025 decision by the Hudson’s Bay Company (HBC) to file for creditor protection under the Companies’ Creditors Arrangement Act (CCAA). The filing affects several joint venture properties shared between the two firms and has prompted RioCan to outline both the financial implications and the company’s proactive strategy to manage the fallout.
RioCan confirmed that its exposure to the Hudson’s Bay situation remains limited in the context of its broader portfolio. As of December 31, 2024, the carrying value of the RioCan-HBC joint venture (JV) amounted to $249.0 million, or approximately 3.3% of RioCan’s total equity.
The joint venture contributed $23.7 million in net operating income (NOI) and $13.6 million in funds from operations (FFO) to RioCan in 2024 on a proportionate share basis. While significant, these figures represent a relatively small slice of RioCan’s diversified real estate operations.
Credit Support and Security Interests
RioCan noted that it had provided a total of $88.7 million in credit support to HBC through the JV. This included a $55.0 million guarantee on a loan and $33.7 million in mezzanine financing. In return, the REIT secured multiple safeguards: it holds a security interest in various joint venture properties and received financial benefits including $6.6 million in fees related to the guarantee and loan arrangements, and $3.3 million in interest income during 2024.
According to the company, these protections place RioCan in a better position to recover value if HBC’s restructuring results in changes to ownership or occupancy of any affected JV properties.
Impacted Real Estate: Prime Canadian Properties at Stake
The RioCan-HBC joint venture portfolio comprises 13 retail locations in key Canadian markets, many of which are considered flagship properties for both companies. These include:
- Downtown properties in Montreal, Vancouver, Calgary, and Ottawa.
- Suburban assets located in leading shopping centres such as: Yorkdale Shopping Centre (Toronto), Scarborough Town Centre (Toronto), Square One Shopping Centre (Mississauga), CF Carrefour Laval (Quebec), Promenades St-Bruno (Quebec), Devonshire Mall (Windsor).
These properties are considered highly desirable, offering strong foot traffic, urban density, and long-term redevelopment potential, said RioCan.
Strategic Outlook: Redevelopment and Recovery Plans
RioCan expressed confidence in its ability to manage the evolving situation. In the statement, the REIT acknowledged its disappointment with the CCAA filing but underscored its focus on leveraging internal capabilities to protect and grow asset value. “We will pursue all available business and legal avenues to protect the interests of our unitholders and stakeholders,” the company said.
RioCan emphasized its extensive experience in managing vacant spaces and transforming retail properties for alternative or mixed-use applications. With a well-documented track record of redevelopment, the company suggested that the impacted sites may offer new opportunities, depending on how HBC’s restructuring unfolds.
Strength of the Core Business
Despite the uncertainty surrounding the HBC joint venture, RioCan reassured investors that its core operations remain robust. The company highlighted its “strong core business, solid balance sheet, and experienced management team” as critical assets that will help it weather any near-term turbulence associated with HBC’s insolvency proceedings.
The message to stakeholders was clear: while RioCan is exposed to the situation, its diversified portfolio and strategic foresight position it well to absorb and adapt to the impact.
