Primaris REIT is investing $19 million to transform the former Hudson’s Bay at Galeries de la Capitale in Quebec City, converting the roughly 163,000-square-foot department store into a multi-tenant retail and restaurant wing as the landlord advances its broader repositioning of former HBC properties.
The project will bring several new tenants to the former anchor through 2027, led by Quebec-based Imaginaire, which will open a 30,500-square-foot flagship on the first level in spring 2027. It will be the largest store in Imaginaire’s network and a major expansion for the specialty retailer, which sells games, collectibles, comics, toys, hobby products and other pop-culture merchandise.
Restaurant-bar ZIBO! has also committed to approximately 5,500 square feet. The second level of the former Hudson’s Bay will be divided into spaces for additional retailers and restaurants, with plans also calling for a new exterior entrance and washrooms. Additional tenants remain under discussion, with spaces expected to be delivered progressively through 2027.
Hudson’s Bay closed its Galeries de la Capitale store in June 2025 as part of the retailer’s liquidation, giving Primaris control of one of the largest blocks of space at the shopping centre. Rather than seeking another department store to occupy the entire premises, Primaris is dividing the building among multiple uses as part of a wider strategy for the former HBC real estate in its portfolio.
Imaginaire Plans Largest Store in its Network
Imaginaire’s new flagship represents an investment of approximately $2 million by the retailer. The store will include an expanded toy and youth offering following the departure of Toys “R” Us from Galeries de la Capitale.
The shopping centre had sought to bring Imaginaire to the property for years. The recent availability of larger blocks of space following the departures of Hudson’s Bay and Toys “R” Us ultimately created an opportunity for a substantially larger store than Imaginaire typically operates.
The opening comes as Imaginaire accelerates its expansion beyond its traditional Quebec base. When Retail Insider interviewed the company as it entered Ontario, management discussed the potential for further expansion outside Quebec if its initial moves proved successful. The Galeries de la Capitale flagship will become the chain’s 11th location, while Imaginaire is now targeting approximately 20 stores within five years, with further growth contemplated in Ontario and Atlantic Canada.
Galeries de la Capitale Adds New Retailers
The $19-million redevelopment comes amid a broader round of leasing and investment at Galeries de la Capitale. Les Ailes de la Mode is preparing to open a roughly 50,000-square-foot store, while lululemon is adding approximately 3,750 square feet. Other additions include Asian beauty retailer Kiokii and…, Campus13 and Café Van Houtte, alongside the new Imaginaire and ZIBO! locations.
The leasing activity is taking place at one of Primaris’s more productive enclosed shopping centres. The REIT’s latest investor materials put Galeries de la Capitale at approximately 1.1 million square feet with more than 200 stores. The property generated approximately $26.1 million in Cash NOI, while rolling 12-month same-store sales productivity reached about $834 per square foot as of May 2026.
Primaris acquired Galeries de la Capitale for $325 million in October 2024. The shopping centre sits on approximately 91 acres and had already received about $165 million of investment during the decade preceding the acquisition, including extensive renovations and investment in its entertainment component.
The closure of Hudson’s Bay created a substantial vacancy less than a year after Primaris acquired the property, but the underlying performance of Galeries de la Capitale remained strong. Regaining the former department store also gave Primaris control of strategically located space that had been occupied at rents well below those the REIT expects to achieve through replacement leasing.
Primaris Repositions Former Hudson’s Bay Space
The Galeries de la Capitale redevelopment provides a tangible example of a strategy Primaris executives have discussed with Retail Insider since the collapse of Hudson’s Bay. Primaris President and CEO Alex Avery told Retail Insider earlier this year that the departure of Hudson’s Bay was “the best thing that has happened to Primaris in many, many years.”
Avery’s comments reflected the unusual economics of the former department store leases, along with restrictions that had limited Primaris’s ability to redevelop portions of some properties. The company has taken a property-specific approach rather than applying a single replacement strategy across its former HBC portfolio, with options ranging from replacement anchors and subdivision among several tenants to more extensive redevelopment.
At Galeries de la Capitale, that strategy is taking the form of multiple retail and restaurant spaces, accompanied by physical changes intended to better integrate the former anchor with the rest of the property. The financial rationale becomes clearer when the rents generated by HBC are compared with Primaris’s replacement leasing.
Across the former Hudson’s Bay locations being repositioned by Primaris, HBC had occupied approximately 1.23 million square feet and generated about $5.1 million in annual minimum rent, averaging approximately $4.18 per square foot.
Primaris said in June that signed or conditional long-term leases covered approximately 608,500 square feet of replacement space. Those leases are expected to generate average net rent of $15.11 per square foot, compared with $3.37 per square foot previously paid by HBC on the corresponding space, representing an increase of approximately 348%.
Including leases in advanced negotiations, approximately 881,400 square feet, or 84% of the former HBC space being remarketed, had been committed or was in advanced discussions. Primaris expects that space to generate average net rent of approximately $16.93 per square foot, compared with $4.25 per square foot under the former HBC leases.
The figures are portfolio-wide rather than specific to Galeries de la Capitale, but they illustrate the economics behind replacing legacy department store leases with new retail space at substantially higher rents.
Once the wider former-HBC leasing and redevelopment program is completed, Primaris expects to create approximately 1.04 million square feet of replacement gross leasable area generating about $18.9 million in annualized net rent and approximately $22 million in Cash NOI. The REIT expects to invest between $175 million and $225 million across the program, with anticipated yields above 10%.
Primaris has also said the projected Cash NOI does not capture potential benefits to surrounding retail space as replacement tenants open and generate additional traffic within the malls. At Place d’Orléans in Ottawa, for example, Walmart has leased approximately 115,500 square feet of former Hudson’s Bay space, while Galeries de la Capitale is being repositioned around multiple retailers and restaurants.
Former HBC Lease Unlocks Development Potential
Regaining the Hudson’s Bay premises has implications beyond the roughly 163,000-square-foot building itself. Former HBC leases included restrictions affecting development on portions of several Primaris properties, and their termination has given the REIT greater flexibility over surrounding mall lands.
At Galeries de la Capitale, Primaris previously identified approximately 31.7 acres that were released from restrictions associated with the former HBC lease. The company has examined substantial longer-term residential intensification at the property, although no residential development has been formally announced.
Primaris Chief Investment Officer Julian Schonfeldt previously told Retail Insider that the company does not intend to become a residential developer. Its strategy is generally to unlock the development potential of appropriate excess lands and monetize them to specialized developers, allowing Primaris to recycle the proceeds into its core enclosed shopping centre business.
For now, the focus at Galeries de la Capitale is the former department store itself. By spring 2027, its first level is expected to include Imaginaire’s largest location, while additional retailers and restaurants will progressively occupy space that until last year was controlled by a single anchor tenant.
The redevelopment will continue through 2027 as Primaris completes the new exterior entrance and delivers additional tenant spaces. Discussions with prospective retailers are ongoing, meaning the final lineup replacing Hudson’s Bay has yet to be fully revealed.
