The real estate investment arm of one of the largest pension funds in the country is concerned about the value of its assets if a BC billionaire can buy leases from Hudson’s Bay in its properties.
In the documents presented before the Superior Court of Ontario during the weekend, Oxford Properties Group argues to transfer leases to “a” unveiled entrepreneur and not tested as Ruby Liu “raises a serious and unacceptable risk for the company.
“A decrease in the value or stability of the Oxford Real Estate portfolio would negatively affect the performance of Omers investments, and by extension, negatively affecting the long -term interests of millions of beneficiaries of the current and future pension plan,” Nadia Corrado, Vice President of Oxford, said in the statements in the declaration of justice in the judicial registry on Saturday.
Oxford is the Real Estate Division of the Municipal Employee Retirement System of Ontario, which manages pensions of more than 600,000 members of the Plan. Oxford has more than $ 79 billion in assets under administration and hundreds of properties on four continents.
Liu, which has three BC shopping centers and a golf course, seeks to take care of about two dozen leases of the bay.
Three of those leases are in Oxford Properties: SouthCentre Mall in Calgary, Hillcrest shopping center in Richmond Hill, ontarium, and Upper Canada Mall in Newmarket, Ontario.
Liu has said that he plans to use the spaces to build a new department store that will appoint itself. It will have three levels of stores (flagship, platinum and standard) full of entertainment, dining and recreation spaces.
She has said that she and a team of 1,800 employees who will hire can open most of the stores within 180 days after the signing of the leases. She has assigned $ 325 million to achieve the feat, which will involve repairing stores, forge relationships with suppliers and marketing their completely new brand.
Liu, who did not comment for this story, has said that he hopes that he can win the owners if the court allows the purchase of the leases to be made.
‘Surprisingly poor and superficial’
However, the owners, including Oxford, are fighting Liu, saying that their plans are insignified, have unrealistic deadlines and will surely fail.
A judicial hearing is scheduled at the case by the end of this month.
Oxford’s doubts about Liu arose as soon as its executives met her on June 2.
“That meeting was unproductive and revealed a worrying absence of financial transparency, commercial sophistication and basic preparation,” Corrado recalled in his affidavit. “Financial statements, financing or evidence of capital preparation were not provided.”
She claimed Liu, who made her fortune in Chinese real estate, told Oxford that she had a business plan but would not provide it unless Oxford promised her support for her to take care of the lease.
When Oxford asked if he had suppliers willing to sell his merchandise to fill stores, Corrado alleges that Liu told the company that “he relaxed, they fall and do not worry.”
The BC billionaire, Ruby Liu, hopes to expand his empire of the mall assuming 28 former retail spaces of Hudson’s Bay. He joined Gloria Macarenko from CBC with a translator to share her vision for department stores, in her first interview with the media in English in Canada.
Oxford had difficulty taking that advice. At stake they were leases with terms from 49 to 65 years and covered some of the company’s most desirable shopping spaces.
The size and orientation of the Bay space in Hillcrest Mall only “means that any falsely affects the general experience of the client, the retention of tenants and, in turn, will reduce the value of the Oxford asset,” said Corrado.
Based on his experience, he said that companies take years to cure a concept for a new retailer, even for one to take care of very small units. She said in the judicial documents that it was difficult to believe that Liu thought that this work could be done in a matter of months even for a single leased location of more than 150,000 square feet and thought that the timeline spoke of Liu’s inexperience.
“The introduction of an anchor tenant not proven that lacks established retail credibility raises a significant risk in the sense that it can degrade the customer experience, reduce the general quality of the mall and generate a” negative halo effect “that affects the entire wings of the shopping center,” said Corrado.
“Since anchor leases can endure for decades, the long -term presence of a poor anchor can permanently and potentially underminate the commercial viability of substantial portions, or even the entire commercial center.”
In their own presentations made on Saturday, many other owners agreed with Oxford’s concerns.
Morguard Investments Ltd. called the information that LIU provided about its “surprisingly poor and superficial and, frankly puerile” plans.
He said he was willing to wait to find a better long -term tenant and, meanwhile, he wants to celebrate temporary leases terminable by the owner with 90 days of notification with the Urban Behavior and Accessors Mindery Ardene clothing company.
Primaris Real Estate Investment Trust said he left four hours of meetings with Liu and his team with “absolutely no confidence that he had the relevant experience or understanding the enormity of what he is looking to undertake opening a commercial concept of several stores in several provinces from the ground.”
Cadillac Fairview felt that his plan “challenges commercial common sense”, but hired Ernst & Young to evaluate it anyway.
A report presented to the Court showed that the consulting firm thought that the estimated costs and deadlines in the LIU business plan were not feasible and would be significantly greater given the large number of repairs that require the properties and complex relationships to be forged with suppliers and other suppliers.
Liu and Bay have until Tuesday to present an answer to the owners in the Court. At the end of the week, interrogation will begin before a judge listens to his case at the end of the month.
