Portfolio totals 83 properties with an Asset Value of $4.8 billion(1)
NEW YORK, LOS ANGELES & COLOGNE, Germany, 2015-10-5 — /EPR Retail News/ — HBS Global Properties, the real estate joint venture between Hudson’s Bay Company (“HBC”) (TSX: HBC) and Simon Property Group Inc. (“Simon”) (NYSE: SPG), is pleased to announce the acquisition of 41 GALERIA Kaufhof properties (the “Acquisition”) in a transaction valued at €2.6 billion (US$3.0 billion)(1)(2). Unless otherwise indicated, all amounts are expressed in US dollars.
With the Acquisition, HBS Global Properties now owns an international property portfolio of 83 marquee retail locations across the United States and Germany, including flagship department stores in Berlin, Beverly Hills, Cologne, Dusseldorf, Frankfurt, the greater New York area, as well as properties in other metropolitan and suburban centers. These properties generate annual cash rents of $274 million(1), valuing the portfolio at approximately $4.8 billion based on a blended cap rate of 5.75%.
“With the close of the Acquisition, HBS Global Properties is taking an important step forward in its next chapter of growth,” stated Richard Baker, Chairman, of HBS Global Properties. “This joint venture will benefit from a strong foundation of HBC properties, now including GALERIA Kaufhof, whose tremendous value has been recognized by our best-in-class partner.”
“In HBC, we have found a unique partner with a proven track record of creating value from retail properties, as well as a strong portfolio of banners that serve as attractive tenants for a range of retail opportunities,” said David Simon, Chairman and Chief Executive Officer of Simon. “As the Acquisition demonstrates, we continue to leverage our combined expertise to significantly expand and diversify the joint venture assets and increase its value for the benefit of investors.”
HBS Global Properties has established a dedicated management team to focus on overseeing the properties and growing the portfolio, with support from HBC and Simon. This team is headed by Lee Neibart, who has more than 40 years of real estate experience. Lee will lead an executive team comprised of Patrick Walmsley, Chief Investment Officer – USA, and Lutz Rupprecht, Chief Financial Officer and Managing Director – Germany, with the support of additional team members in both Los Angeles and Cologne.
“In a relatively short period of time, we have built a fantastic portfolio of properties,” said Lee Neibart, Chief Executive Officer of HBS Global Properties, “I am excited to work with our team in North America and Europe to continue to grow our portfolio through accretive acquisitions.”
In addition to pursuing attractive credit tenant, net-leased and multi-tenanted retail buildings in the United States and Europe, HBS Global Properties will have a mandate to explore similar international opportunities. The entity is structured to facilitate an IPO or other monetization of the joint venture at a future date.
(1) Assumes a EURUSD exchange rate of 1.13
(2) Represents value of properties after all transactions are completed, including the post-closing acquisition of certain real estate properties and the minority interest, expected to occur within 6 months.
HBS Global Properties
Phone: (212) 391 3179