RioCan is forming a joint venture with Hudson’s Bay Company (HBC), with the plan to scope out new real estate and redevelopment opportunities and improve existing assets across Canada.

Edward Sonshine, chief executive officer of RioCan, said the venture will help create a unique real estate portfolio with “excellent potential for future urban mixed-use redevelopment.”

RioCan has agreed to invest $325 million in return for equity stake of 20.2 per cent. This includes a $144.3 million equity contribution through the sale of a 50 per cent interest in two Ontario-based mall properties.

“As part of this transaction we have been able to secure one of Canada’s leading retailers in two key properties, being Georgian Mall and Oakville Place, for an additional twenty years, solidifying the strength of these shopping centres for years to come,” said Sonshine.

Overall, the venture will add ten key properties across Ontario, Alberta, British Columbia and Quebec, amounting to more than 3.2 million square feet and a deal said to be valued at $2 billion.

In addition, 42 properties will be added to a U.S. venture between HBC and Indianapolis-based Simon Property Group.

Together the REITs will contribute $670 million of cash and property and help cut HBC’s debt by about $1.1 billion, unlocking asset value previously unrealized.