Primaris REIT has secured full control of five former Hudson’s Bay Company (HBC) leases after they were disclaimed in HBC’s ongoing Companies’ Creditors Arrangement Act (CCAA) proceedings.

The REIT also stands to gain up to four more if they are returned. Primaris announced previously that it expected the stores to close.

The sites, located in Kingston, Ont.; Orleans, Ont.; Quebec City; Medicine Hat, Alta.; and and Calgary, will be under Primaris’ control effective June 16.

The disclaimed properties comprise 532,100 square feet of gross leasable area. Their removal reduces Primaris’ first-quarter 2025 pro forma portfolio occupancy by 3.7 percentage points and eliminates $5.5 million in annual revenue. However, the REIT views the move as a strategic opportunity to unlock value through redevelopment.

“Regaining control of five of our valuable anchor locations allows Primaris to commence repurposing a significant amount of low-productivity space, and marks the beginning of our value-surfacing exercise,” commented Alex Avery, CEO. “While HBC has been the focus of a lot of discussion and attention, the real story is just beginning, as the disclaiming of leases has finally removed obstructionist barriers, enabling us to enhance our properties.

“We are confident that the quantitative and qualitative benefits of regaining control of these spaces will be materially positive for our properties and our unitholders.”

Primaris plans to invest $50–$60 million to redevelop the five sites, reducing total GLA to 475,000 sf. Initial tenant occupancy is expected by the second quarter of 2026, with rent payments beginning as early as 2027. The REIT anticipates an 8% to 9% yield on invested capital from the projects.

In parallel, four additional HBC leases remain subject to bids from prospective retailers. While details are limited, Primaris believes it will have substantial influence over the outcome due to deferred maintenance and the investment required to restore the properties.

Despite these transitions, Primaris has reiterated its full-year 2025 financial guidance, emphasizing its confidence in both short- and long-term performance.

Pictured: Hudson’s Bay store at Primaris REIT-owned Oshawa Centre in Oshawa, Ont.

Photo: Yellow Pages