Open this photo in gallery Pedestrians walk past a Hudson's Bay Co. store in downtown Vancouver on Jan. 11, 2017. Ben Nelms/Bloomberg

Canadian department store owner Hudson’s Bay Co and joint venture partner RioCan REIT have signed a conditional agreement to sell HBC’s flagship store in downtown Vancouver for about C$675 million ($524.4 million) to an Asian buyer, a person familiar with the matter told Reuters.

The buyer, who owns a closely held real estate company, is seeking to arrange interim financing from at least one Canadian lender, according to the person, who declined to be identified as the deal has not been made public yet. The source declined to identify or give the nationality of the buyer, but said the deal is expected to be finalized by mid-June.

RioCan and Hudson’s Bay, which owns the Saks Fifth Avenue and Lord & Taylor brands, said in October they were exploring the sale of the store.

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The deal progresses HBC’s efforts to extract value from its sizeable real estate holdings as it battles a retail industry-wide slump. It follows the sale of its Lord & Taylor flagship store on New York’s Fifth Avenue to WeWork Companies Inc for $850 million last year, helping ease tensions between the company and activist investor Jonathan Litt, who had been calling for HBC to sell some stores, convert them to alternate uses or go private.

Related: HBC invites bids for Vancouver flagship store amid investor anxiety

A HBC spokeswoman declined to comment. A RioCan spokeswoman referred questions to Hudson’s Bay.

“In addition to a confirmation from the company of this potential sale, we would also look for details on the expected lease rate HBC would be paying as it will continue to operate a store at this building as a tenant,” RBC Dominion Securities analyst Sabahat Khan wrote in a note, adding he would see the company’s use of the proceeds to pay down debt, if it does so, as a positive.

Hudson’s Bay is expected to sign a 20-year lease with the new owner, according to the person familiar with the matter. As part of the WeWork deal, the shared office space operator also agreed to lease the top floors of the Vancouver and other Hudson’s Bay stores.

HBC shares rose as much as 4.6 percent to a three-week high after the Reuters report, and were trading up 3.9 percent at C$9.24 at 12:52 pm ET (1652 GMT), versus broad declines in U.S. department store shares including Macy’s, Kohls and J C Penney Company.

RioCan shares rose 0.5 percent to C$23.50, while the Toronto stock benchmark rose 0.6 percent.

Hudson’s Bay shares have lost two-thirds of their value in the past three years, hurt by disappointing earnings for several quarters. The company valued its real estate at $35 a share before the Lord & Taylor store sale.

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RioCan shares have fallen 19 percent in the same period, compared with a 5.3 percent gain in the Toronto stock benchmark .

RioCan is also shifting its strategy, honing in on malls in major Canadian cities and developing more condos and rental apartments to capitalize on surging demand for housing.

HBC owns 88.1 percent of the joint venture, but its terms entitle RioCan to 20 percent of the sale proceeds, the person said. HBC is responsible for a C$200 million mortgage on the property the JV announced in October, the source said.

The JV now owns properties including Hudson’s Bay stores in Montreal, Calgary and Ottawa, and 50 percent stakes in Oakville Place and Georgian Mall in Ontario province.

CBRE and Brookfield Financial Real Estate Group handled the sale.