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Idea of real estate IPO soars Hudson’s Bay

Hudson’s Bay Co. had its biggest gain in 16 months after the owner of Saks Fifth Avenue signalled it may take its real estate assets public, unlocking value for the Canadian retailer as same-store sales decline.

In a call with analysts Wednesday, Chairman Richard Baker showed a new sense of urgency when asked about his real-estate plans as U.S. interest rates rise.

An initial public offering of a real estate investment trust has been a goal since Hudson’s Bay teamed up with REITs in the U.S. and Canada to create joint-ventures two years ago. At the time, Baker said he wanted to “fatten up the portfolio” first.

“We have a tremendously valuable portfolio of realestate, which could be monetized in a variety of ways,” Baker said on a call discussing quarterly results. “What we should have done and what we should be doing as quick as possible is IPO-ing our U.S. real-estate portfolio and/or IPO-ing our Canadian real-estate portfolio.”

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