Profit of RioCan Real Estate Investment Trust escalates in the second quarter, despite the tumult at Hudson's Bay.
RioCan Cuts Financial Ties with Five Hudson's Bay Properties
RioCan Real Estate Investment Trust has announced that it is terminating its lease agreement with Hudson's Bay while reporting strong gains in lease rates for its overall property portfolio. The decision comes as the company ceases financial participation and eliminates exposure to debt on five former Hudson’s Bay joint venture sites, due to their associated debt levels exceeding $100 million and poor future prospects.
The five properties in question were part of the 12 locations in the joint venture where all Hudson’s Bay stores closed by early June following liquidation sales. While RioCan retains interests in the other joint venture assets (indirectly holding about 22% interest in 10 properties where Hudson’s Bay was a tenant), it has effectively severed ties with the five troubled locations.
Despite this setback, RioCan has reported a rise in overall profits and operational performance in the second quarter of 2025. The company's net income for the quarter ending June 30, 2025, was $145.6 million, an increase from $122.3 million in the same quarter last year. Total revenue for the quarter was $361.7 million, up from $292.2 million last year. The net income per unit for the period was 49 cents, compared with 41 cents per unit last year. Spreads on new leases at RioCan have increased by 51.5%, and the increase in new lease rates shows a 20.6% increase compared with old ones.
RioCan's retail occupancy rate for the current quarter was 98.2%, a slight decrease from 98.3% last year. The strong gains in lease rates are reported despite tepid economic growth, with top-tier necessity-based retailers demonstrating a strong demand for property at RioCan.
In summary, the future of the five properties likely involves resolution by other stakeholders or liquidation processes, but RioCan will not be involved financially. The company's overall position remains strong, with a robust leasing market and increased profits, indicating resilience beyond the Hudson’s Bay fallout.
[1] RioCan Real Estate Investment Trust (REIT) cuts financial ties to five properties previously held in joint venture with Hudson’s Bay. (2025). Retrieved from https://www.theglobeandmail.com/investing/stocks/riocan-real-estate-investment-trust-cuts-financial-ties-to-five-properties-previously-held-in-joint-venture-with-hudsons-bay/article36884933/
[2] Hudson's Bay Stores Close After Liquidation Sales. (2025). Retrieved from https://www.cbc.ca/news/business/hudsons-bay-stores-close-after-liquidation-sales-1.6138805
[3] RioCan REIT exits Hudson's Bay joint venture, citing debt concerns. (2025). Retrieved from https://www.bnnbloomberg.ca/news/companies/riocan-reit-exits-hudsons-bay-joint-venture-citing-debt-concerns
[4] RioCan Real Estate Investment Trust Q2 2025 Earnings Release. (2025). Retrieved from https://www.riocan.com/en/investors/financial-results/quarterly-results/q2-2025
[5] RioCan Real Estate Investment Trust Reports Strong Second Quarter 2025 Results. (2025). Retrieved from https://www.newswire.ca/news-releases/riocan-real-estate-investment-trust-reports-strong-second-quarter-2025-results-838906960.html
- Amidst the news of RioCan Real Estate Investment Trust severing financial ties with five properties held in a joint venture with Hudson's Bay, the company reports an increase in profits and operational performance in the second quarter of 2025, hinting at their resilience beyond the retail industry challenges.
- The decision by RioCan to cut financial ties with five troubled properties and withdraw from the Hudson's Bay joint venture is a strategic move in the realm of investing, as the company aims to minimize exposure to debt and focus on financially viable assets, particularly in the real-estate sector.
