Several major Canadian real estate companies are criticizing efforts by a British Columbia billionaire to acquire 25 former Hudson’s Bay leases, labeling her plan for the spaces as “unrealistic” and not aligning with sound business principles. Landlords such as Cadillac Fairview, Oxford Properties, Ivanhoe Cambridge, KingSett Capital Inc., Morguard Investments Ltd., and Primaris Real Estate Investment Trust have filed motions with the Ontario Superior Court to prevent the billionaire, Liu, from taking over.
The landlords have expressed concerns about Liu’s lack of a detailed or credible business strategy and her limited experience and resources to effectively run retail operations in the former Hudson’s Bay locations. Rory MacLeod, the executive vice-president of operations at Cadillac Fairview, described Liu’s business as precarious, lacking financial stability beyond her assertions to keep it operational. The landlords fear that Liu’s company may face financial difficulties even before opening its first store.
The dispute between Liu and the landlords escalated after Hudson’s Bay selected Liu to acquire 28 of its leases, with the first three successfully transferred due to their existing presence at Liu’s malls. However, the remaining 25 leases have faced challenges, especially since they cover prime retail spaces with favorable terms for Hudson’s Bay. The landlords argue that Liu’s proposed plans do not align with the original lease terms, which only permit department store operations in those locations.
Additionally, concerns have been raised regarding the feasibility of Liu’s timelines and budget outlined in her business plan. Landlords question Liu’s ability to meet her ambitious targets of opening multiple stores within a short period and executing significant repairs and renovations with the allocated budget. There are also doubts about Liu’s staffing estimates, as her proposed number of employees appears inadequate for running a nationwide retail chain effectively.
The ongoing legal battle highlights the skepticism among landlords regarding Liu’s capability to succeed in operating the acquired leases. The landlords emphasize the potential negative impact of Liu’s venture failing, not only on the affected properties but also on the overall retail landscape for years to come. Liu and Hudson’s Bay have until the end of the month to respond to the allegations, with a court hearing scheduled to address the matter.