A Comprehensive List of REITs in Canada

Canada has a thriving real estate investment trust (REIT) market, offering a wide range of investment opportunities for both individual and institutional investors.

There are currently over 40 REITs listed on the Toronto Stock Exchange (TSX), with many more traded on the TSX Venture Exchange.

Some of the most well-known REITs in Canada include RioCan REIT, which is one of the largest REITs in the country, and Canadian Apartment Properties REIT (CAPREIT), which focuses on residential properties.

Investing in REITs can provide a stable source of income and diversification in a portfolio.

Canadian REITs offer a range of types to suit different investment goals and risk tolerance.

Equity REITs own and invest in property, generating income primarily through rent payments from leasing their properties.

Mortgage REITs, or mREITs, finance property, generating income from interest on loans they make to finance property.

Hybrid REITs do a bit of both, owning property and financing property.

Canadian REITs are incredibly diverse, with various types catering to different sectors of the real estate market. Residential REITs focus on properties like apartment complexes and condominiums, generating income primarily through rental payments from tenants.

Commercial REITs invest in office buildings, shopping malls, and other commercial properties, deriving income from leasing space to businesses. This type of REIT can be attractive for its potential for higher yields, but it may also be more sensitive to economic cycles.

Industrial REITs focus on warehouses, distribution centers, and industrial facilities, benefiting from the growing demand for logistics and e-commerce infrastructure. They typically offer stable and predictable income streams due to long-term leases with tenants in the manufacturing, warehousing, and distribution sectors.

Healthcare REITs invest in properties like hospitals, nursing facilities, and medical office buildings, capitalizing on the consistent demand for healthcare services. The aging population and increasing healthcare needs make healthcare REITs a resilient option.

Retail REITs own and manage shopping centers, malls, and retail stores, generating income through leasing space to retailers. While retail REITs can offer high returns, they are also susceptible to changes in consumer behavior and economic downturns.

Specialty REITs focus on niche markets such as self-storage facilities, data centers, and cell towers, offering unique investment opportunities and diversification benefits.

Public REITs are traded on major stock exchanges, making them easily accessible to general investors.

These REITs are subject to rigorous regulatory oversight, ensuring transparency and accountability.

Investors can buy and sell shares of public REITs with the same ease as trading stocks, providing liquidity and flexibility.

Public REITs often attract a wide range of investors due to their accessibility and the potential for steady income through dividends.

Private REITs in Canada are not traded on public exchanges and are typically available only to eligible, accredited or institutional investors.

These REITs will often require a higher minimum investment and are less liquid compared to their public counterparts.

Private REITs can offer potential advantages such as higher returns and less sensitivity to market fluctuations.

While they may involve higher risks, they also provide opportunities for more personalized investment strategies, greater consistency in returns, and potentially greater control over property management decisions.

Investing in REITs can be a great way to earn a steady income, as most REITs distribute a significant portion of their income to shareholders each year, typically a minimum of 90%. This means you can expect to receive a regular dividend payment.

REITs are also a popular choice because they're relatively easy to understand - think of them as a way to invest in real estate without directly managing properties. By investing in a REIT, you're essentially buying a share of a company that owns and manages real estate, such as apartment buildings, office towers, or shopping malls.

A key advantage of REITs is their ability to protect against inflation, as property values and rents tend to increase over time. This makes them a good option for investors looking for a hedge against inflation. Some REITs also have a history of consistent dividend growth, even during market downturns.

Here are some key characteristics of REITs to keep in mind:

REITs can be a great investment option, but it's essential to know the pros and cons before diving in.

One of the biggest advantages of REITs is that they usually have above-average dividend yields, which can be a significant perk for income investors.

REITs are also good protectors from inflation, as property values and rents tend to increase over time, but fixed-interest on the debt that finances the properties doesn't.

However, REITs often have lower dividend growth compared to companies in other sectors.

Real estate, if managed conservatively, can be a reliable investment for income and in times of recession, assuming tenants pay their rent.

But, since REITs have to pay most of their income as dividends, they have little downside protection from recessions.

Here's a summary of the advantages and disadvantages of REITs:

Sustainable distributions are a crucial aspect of investing in REITs. A REIT with a sustainable distribution is one that can consistently pay out dividends to its shareholders.

The Dividend Advisor has identified several REITs with sustainable distributions, and we'll take a look at the top five. According to the TSI Dividend Sustainability Score, RioCan REIT, H&R REIT, Primaris REIT, Choice Properties REIT, and Allied Properties REIT all have above-average or average sustainability ratings.

Here are the top five REITs with sustainable distributions:

These REITs have a strong track record of paying out dividends to their shareholders, and their sustainability ratings are a testament to their financial health.

When evaluating a REIT's performance, it's essential to consider its Net Asset Value (NAV). The NAV is calculated by subtracting liabilities from the total property fair market value and can be translated to a Price to Book ratio.

A lower than industry NAV can be a sign of either a riskier play or a value play. To determine which one it is, you need to look at the AFFO and LTV.

The AFFO, or Adjusted Funds from Operations, is a non-GAAP measure that provides a better idea of a REIT's actual profitability and cash flow available for dividends. It's calculated by adding depreciation back to FFO and then subtracting recurring capital expenditures.

REITs with strong FFO and AFFO tend to perform well over time, and a good history of consistent dividend growth is also a positive indicator.

Canadian Apartment Properties (CAPREIT) is a great choice for steady income, enjoying a strong core business in Canada and expanding into Ireland and the Netherlands.

CAPREIT has consistently exhibited high-single-digit organic growth, making it an attractive option for investors looking for reliable returns.

Unfortunately, CAPREIT neglected to increase its dividend in 2020, but fortunately, they won back their dividend safety score of 3 in 2021.

If you're looking for a diversified portfolio of high-quality REITs, Parvis offers a selection of REITs that have been meticulously vetted and chosen for their strong performance and potential.

Pier 4 REIT is a private REIT that invests in multi-family buildings in Canada, providing investors with the opportunity to diversify their portfolios and gain investment exposure to high-level real estate assets.

Honeytree REIT is a tech-focused hospitality REIT that specializes in acquiring value-add hotels and enhancing guest experiences through AI-driven automated check-ins and digital concierge services.

Nearctic Industrial REIT has a collection of functional and flexible assets, consisting of Class A industrial properties located in Central Business districts, with a focus on long-term growth in Canadian markets.

Cascadia Green REIT is a private REIT that provides exclusive access to a pipeline of multi-family development assets in Greater Vancouver, partnering with an established development arm to benefit from favorable positions taken in developments and acquisitions.