2 TSX REITs to watch out for in 2023 - Kalkine Media

January 06, 2023 08:05 AM EST | By Tamnna
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  • The Canadian REIT market has witnessed 2.50per cent growth quarter-to-date.
  • SmartCentres trustees agreed to pay a C$0.15417 dividend for December 2022.
  • Allied, on the other hand, increased its dividend by 2.9per cent for 2023.

The Canadian real estate investment trusts (REITs) industry has grown measurably since its foundation in 1993. Canada’s top 10 REIT holdings had a combined market capitalization of more than C$ 45 billion to date, and the market has seen 2.5 per cent growth quarterly.

REITs have been instrumental in giving millions of Canadians a steady income using a pool of real estate investments. Additionally, the REITs sector has created several opportunities for common people to own commercial real estate, a practice that institutional investors have been capitalizing on for many years.

In light of this, let’s head over to two TSX REITs and learn what’s new has happened at both REITs:

SmartCentres REIT (TSX:SRU.UN)

SmartCentres is a fully integrated commercial and residential REIT primarily engaged in establishing mixed-use, complete, and connected communities on its own retail properties. This REIT is one of the leading Canadian REITs with a market cap of C$ 3.97 billion and a 3-year dividend growth rate of 1.22per cent.

SmartCentres trustees have recently declared a distribution for December 2022 of C$ 0.15417 per trust unit, which indicates C$ 1.85 per unit on an annual term.

Apart from the distribution declaration, the trust also shared its third-quarter results for 2022. Notably, leasing activity for shopping centres increased to a significant high of 98.1 per cent in Q3 2022, driven by improved occupancy levels.

Meanwhile, the same properties NOI inclusive of ECL and excluding of ECL increased by C$ 3.9 million and C$ 3 million, respectively, in Q3’22 compared to Q3’21. Also, the net rental income increased by 2.9 per cent during the third quarter of 2022 from Q3 2021.

For Q3 2022, FFO (funds from operations) for SmartCentres was C$ 93.76 million, merely down from C$ 93.9 million in Q3 2021. The trust’s net and comprehensive income totalled C$ 3.5 million for Q3’22, way below C$ 178.1 million in Q3’21, triggered by a C$ 177.7 million decrease in fair value adjustments on the revaluation of investment properties.

Allied Properties (TSX: AP.UN)

Allied Properties develops and manages unique urban workspaces in Canada’s main cities and network dense UDC spaces in Toronto and Montreal. The total market capitalization of this REIT is C$ 3.45 billion with a 5-year dividend growth rate of 2.4 per cent.

Last month, Allied informed the market of increasing its monthly cash distribution for 2023 by 2.9 per cent to C$ 0.15 per unit (C$1.80 per unit annually) from C$ 0.1458 per unit in December 2022.

Allied mentioned generating total rental revenue of C$ 157.1 million as of September 30, 2022, 10.2 per cent up from C$ 142.6 million for the same period in 2021. Other financials are summarized below:

© 2023 Krish Capital Pty. Ltd.

Bottom line:

Volatility might continue to disrupt the equities market this year. Hence, make sure to conduct in-depth market research and analyze the fundamentals of a REIT before choosing to invest.

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.


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