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Highlights
- Investors might prefer to invest in REITs like Canadian Apartment Properties REIT (TSX: CAR.UN), which can let investors benefit from the Canadian real estate market.
- Units of an REIT listed below spiked by almost 16 per cent in the last one year.
- Some REITs are also known to provide regular dividend income.
Rising inflation and borrowing rates might have pushed equity investors away from growth stocks, which are known to have high price-to-earnings (P/E) ratio and involves high risk.
Keeping in mind the ongoing market environment, investors might prefer to invest in Real Estate Investment Trusts (REITs) like Canadian Apartment Properties REIT (TSX: CAR.UN), which can let investors benefit from the Canadian real estate market. Additionally, REITs are also known to provide regular dividend income.
Here are five TSX-listed REITs that Canadians can explore to benefit from Canada’s real estate market in the long run.
1. Canadian Apartment Properties REIT (TSX: CAR.UN)
Canadian Apartment Properties REIT abbreviated as CAPREIT, completed the purchase of the 172-site Manufactured Housing Community (MHC), developed in 2000, in Red Deer, Alberta, on May 2. This REIT will dole out a monthly dividend of C$ 0.121 per unit on May 16.
CAPREIT’s unit plunged by almost 11 per cent year-on-year (YoY). According to EODHD/Others, CAR.UN had a Relative Strength Index (RSI) value of 30.46 on May 2.
2. RioCan REIT (TSX: REI.UN)
RioCan announced its five-year growth targets for 2022-2026 in February 2022. The REIT expects its annual funds from operations (FFO) per unit to grow five to seven per cent over the next five years. RioCan is also scheduled to pay a monthly dividend of C$ 0.085 apiece on May 6.
REI.UN jumped by over nine per cent in the past 12 months. The RioCan unit breached its resistance level of C$ 22 in February and increased as high as C$ 26 in March, according to EODHD/Others. However, it appears to have fallen below its support level in May, with an RSI value of 26.76.
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3. Granite REIT (TSX: GRT.UN)
Granite REIT operates and manages industrial properties in North America and Europe. The Trust earned a net operating profit of C$ 86.3 million in Q4 FY2021, up from C$ 77.5 million in Q4 2020. Its funds from operations amounted to C$ 66.8 million in the latest quarter compared to C$ 59.6 million a year ago.
Granite RIET’s adjusted funds from operations (AFFO) were C$ 59.2 million in Q4 2021 against C$ 56.1 million in the last quarter of 2020. It is expected to pay a monthly dividend of C$ 0.258 per unit on May 16.
As of its unit performance, GRT.UN spiked by almost 16 per cent in the last one year.
4. Dream Industrial REIT (TSX: DIR.UN)
Dream Industrial REIT is engaged in acquiring, managing, and developing industrial properties across Canada and the U.S. The REIT and Dream Unlimited Corp established a C$ 1.5 billion joint venture (JV) in the Greater Toronto Area (GTA) with a global wealth fund in April.
The Trust will pay a monthly dividend of C$ 0.058 per unit on May 13. Units of Dream Industrial grew by over two per cent in the last one year. DIR.UN’s RSI value of 24.11 on May 2 represents a bearish situation.
5. Allied Properties REIT (TSX: AP.UN)
Allied Properties REIT earned a rental revenue of C$ 144.82 million in Q1 FY2022 compared to C$ 140.83 million a year ago. Notably, its net profit expanded by 141.5 per cent YoY to C$ 187.19 million in the first three months of fiscal 2022. The Trust noted a YoY surge of 30.2 per cent to C$ 77.34 million in its FFO in the latest quarter.
Allied Properties is scheduled for a monthly dividend disbursement of C$ 0.146 per unit on May 16. AP.UN sank by about five per cent in the past 12 months.
Bottomline
Investors aiming for passive income could consider these REITs. Although REITs offer exposure to the real estate market, investors should also be mindful of market forces that could affect the sector and impact the performance of REITs.
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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
