Are these two TSX REITs worth exploring in Q2 2023? - Kalkine Media

March 20, 2023 02:44 AM EDT | By Raza Naqvi
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Highlights

  • MLS Home Price Index for February 2023 showed a sharp 15.8% year-over-year.
  • In Q4 2022, CT REIT’s property revenue was C$ 135.17 million compared to C$ 129.53 million in Q4 2021.
  • The net rental income of the REIT amounted to C$ 281.6 million in 2022, up 29.2 per cent YoY.

Increased interest rates and stubborn inflation that reduce disposable income significantly slowed Canada's once vibrant housing market in 2022. Housing affordability has fallen to a 30-year low, and the MLS Home Price Index for February 2023 showed a sharp 15.8% year-over-year decline in average home prices in Canada.

Regardless of how the real estate market performs in the future, some people explore Real Estate Investment Trusts (REITs) to get exposure to the real estate markets. REITs generally provide passive income to shareholders. Hence, many investors take an interest in them.

However, as nothing is certain in an equity market, there are no guaranteed returns with REITs or any other form of securities.

This article will explore two REITs- CT Real Estate Investment Trust (TSX: CRT.UN) and Dream Industrial Real Estate Investment Trust (TSX: DIR.UN) to see how they've performed.

CT Real Estate Investment Trust (TSX: CRT.UN)

This REIT invests in retail properties across Canada and has a strong presence in Ontario. Also, it operates in Quebec and areas of Western Canada.

In Q4 2022, CT REIT’s property revenue was C$ 135.17 million compared to C$ 129.53 million in Q4 2021. This reflected a growth of 4.4 per cent year-over-year (YoY).

Notably, the net operating income jumped 5.8 per cent YoY to C$ 106.76 million in Q4 2022. Meanwhile, the net income of the REIT was C$ 74.7 million.

In 2022, the funds from the operations of CT REIT amounted to C$ 296.2 million compared to C$ 287.56 million in 2021.

CT REIT paid a monthly dividend of C$ 0.072 apiece, and the dividend yield was 5.49 per cent at the time of writing.

Dream Industrial Real Estate Investment Trust

As the name suggests, Dream Industrial's portfolio consists of industrial properties and has a presence in Canada, Europe, and the USA.

Dream's diluted fund from operations per unit amounted to C$ 0.89 in 2022, up by nine per cent YoY from C$ 0.81 in 2021. While, in Q4 2022, it surged by 10.4 per cent YoY to C$ 0.23.

The net rental income of the REIT amounted to C$ 281.6 million in 2022, up 29.2 per cent YoY. Also, the net income increased significantly by 16 per cent YoY to C$ 705.9 million.

The REIT distributed a monthly dividend of C$ 0.058 per share; its dividend yield was around five per cent on March 17.

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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