10 Best Canadian REITs to Invest in for 2025
Canadian REITs have become increasingly popular among investors seeking reliable income and potential capital appreciation. These real estate investment trusts offer a unique opportunity to diversify portfolios while gaining exposure to Canada’s robust property market. With their attractive dividend yields and tax advantages, Canadian REITs have gained attention from both novice and experienced investors alike.
This article explores the top Canadian REITs to consider for investment in 2025. It examines various factors such as market capitalization, dividend yields, and growth potential to identify the best Canadian REIT stocks. From retail-focused trusts to those specializing in industrial properties, this list covers a range of options to help investors make informed decisions about adding Canadian REITs to their investment strategies.
SmartCentres REIT (SRU.UN)
Image Source: SmartCentres
SmartCentres REIT is one of Canada’s largest fully integrated REITs, with a portfolio of 191 strategically located properties across the country [1]. With approximately CAD 16.66 billion in assets, it owns 35.0 million square feet of income-producing retail and office properties, boasting a 98.5% occupancy rate [1]. SmartCentres has expanded its focus beyond retail, venturing into mixed-use developments to create vibrant community hubs.
SRU.UN Retail Leadership
SmartCentres’ retail dominance is anchored by its partnership with Walmart, which began in 1994 . This collaboration has resulted in the development of 176 Walmart stores across Canada, solidifying SmartCentres’ position as a leader in value-oriented retail spaces .
SRU.UN Diversification Strategy
The REIT is actively pursuing a CAD 20.68 billion transformation plan called ‘Project 512’ . This initiative aims to diversify its portfolio by developing holistic master plans for each property, including rental apartments, condos, senior residences, and other mixed-use elements .
SRU.UN Dividend Yield Analysis
SmartCentres offers an attractive dividend yield of 7.10% as of October 2024 . The REIT has maintained dividend growth for over 16 years, with a current monthly dividend of CAD 0.21 per share . While the high yield is appealing to income-seeking investors, it’s important to note the tight cash flow coverage and high payout ratio of 98.82% .
Granite REIT (GRT.UN)
Image Source: Granite REIT
Granite REIT is a Canadian-based real estate investment trust specializing in logistics, warehouse, and industrial properties across North America and Europe. With a portfolio of 143 investment properties spanning approximately 63.3 million square feet of leasable area, Granite has established itself as one of the best Canadian REITs in the industrial sector [1] .
GRT.UN Industrial Real Estate Dominance
Granite’s focus on industrial properties, including warehouses, factories, and data centers, positions it as a leader in this thriving real estate sub-sector. The trust’s strategic acquisitions and developments have contributed to its impressive growth, with revenue averaging about 10% growth per year over the last decade .
GRT.UN International Exposure
While heavily concentrated in North America, Granite’s international presence provides valuable diversification. The trust operates in five countries, carefully selecting locations with minimal geopolitical risk and strong long-term fundamentals . This global footprint allows Granite to capitalize on opportunities in key distribution and e-commerce markets worldwide.
GRT.UN Financial Health
Granite REIT boasts a strong financial position, with a low leverage ratio and a solid balance sheet. The trust’s monthly dividend of CAD 0.28 per share translates to an attractive 4.1% yield, supported by a conservative 70% payout ratio based on adjusted FFO for 2024 . This financial stability positions Granite as an appealing option for investors seeking reliable income from top Canadian REITs.
Canadian Apartment Properties REIT (CAR.UN)
Image Source: capreit
Canadian Apartment Properties REIT (CAPREIT) stands as Canada’s largest publicly traded provider of quality rental housing. As of December 31, 2023, CAPREIT owned approximately 64,300 residential apartment suites, townhomes, and manufactured home community sites across Canada and the Netherlands, with investment properties valued at around CAD 22.90 billion [1]. This extensive portfolio positions CAPREIT as one of the top Canadian REITs in the residential sector.
CAR.UN Residential Market Position
CAPREIT has established itself as a leader in the Canadian residential REIT market, focusing on mid-tier and luxury segments. The trust’s properties are strategically located near major urban centers and public amenities, catering to the growing demand for quality rental housing . With a significant presence in the Greater Toronto and Greater Montreal regions, CAPREIT benefits from strong rental markets in Canada’s largest metropolitan areas.
CAR.UN Portfolio Quality
CAPREIT’s commitment to portfolio quality is evident in its strategic approach to property management. The trust has been actively upgrading its holdings, selling older properties and investing in newer, refurbished units . This capital recycling program aims to enhance the overall quality of CAPREIT’s assets and improve operational efficiency. Additionally, CAPREIT has secured a CAD 97.16 million loan for deep energy and decarbonization upgrades across 60 multi-residential buildings, demonstrating its commitment to sustainability and long-term value creation .
CAR.UN Growth Trajectory
CAPREIT’s growth strategy is supported by several factors, including strong demand driven by immigration and a shortage of multi-family housing across Canada . The trust’s focus on acquiring post-2018 properties, which are not subject to rent control, allows for greater flexibility in rental rate adjustments . CAPREIT’s financial performance reflects its growth potential, with operating revenues increasing to CAD 382.81 million in Q1 2024, up from CAD 362.13 million in the same period last year . This growth, combined with a high occupancy rate of 98.4% in its Canadian residential portfolio, underscores CAPREIT’s strong market position and potential for continued expansion in the Canadian REIT landscape [5].
Allied Properties REIT (AP.UN)
Image Source: Allied Properties
Allied Properties REIT is a leading owner of urban office space in Canada’s major cities. With a portfolio of 195 rental properties valued at CAD 11.66 billion, Allied focuses on distinctive urban workspaces [1]. The trust’s strategy centers on providing high-quality office spaces in prime urban locations, catering to a diverse range of tenants.
AP.UN Urban Office Space Focus
Allied’s portfolio comprises approximately 14.2 million square feet of leasable area across key urban centers, including Toronto, Montreal, and Vancouver [1]. The trust’s properties are strategically located in amenity-rich neighborhoods, attracting tenants seeking modern, collaborative workspaces.
AP.UN Tenant Diversity
Allied boasts a diverse tenant base across various industries. The trust’s focus on user experience supports ongoing leasing efforts, with 469,375 square feet of gross leasable area leased in a recent quarter . This approach has helped maintain a strong occupancy rate of 87.1% in its rental portfolio [1].
AP.UN Development Pipeline
Allied has an active development pipeline, including projects like King Toronto and QRC West, Phase II . These developments aim to expand the trust’s portfolio and capitalize on the growing demand for urban office space in Canada’s major cities.
Dream Industrial REIT (DIR.UN)
Image Source: Dream CA
Dream Industrial REIT is a leading Canadian REIT specializing in industrial properties across Canada, the U.S., and Europe. With a portfolio of 339 assets totaling approximately 71.9 million square feet of gross leasable area, Dream Industrial has established itself as a significant player in the industrial real estate sector [1].
DIR.UN Industrial Sector Strength
The trust’s focus on high-quality industrial assets in markets with strong operating fundamentals has positioned it well in the competitive REIT landscape. Dream Industrial’s strategy includes owning and operating properties that offer long-term cash flow and net asset value growth prospects .
DIR.UN Geographic Expansion
Dream Industrial has been expanding its presence in the European light industrial and logistics market. The trust has acquired assets in the Netherlands and Germany, capitalizing on the attractive fundamentals driven by e-commerce growth and limited supply of high-quality products .
DIR.UN Occupancy Rates
As of June 30, 2024, Dream Industrial REIT reported an in-place and committed occupancy rate of 95.4% . This high occupancy rate demonstrates the trust’s ability to attract and retain tenants across its diverse portfolio.
CT REIT (CRT.UN)
Image Source: Seeking Alpha
CT REIT, one of the largest Canadian REITs, offers stability and income for investors seeking exposure to the real estate sector. With a strong connection to Canadian Tire, this REIT provides a unique investment opportunity in the Canadian market.
CRT.UN Canadian Tire Synergy
CT REIT’s portfolio is closely tied to Canadian Tire, with 92% of its rent coming from the retail giant [1]. This relationship ensures a stable income stream, as Canadian Tire is an investment-grade tenant with long-term leases . The REIT’s structure resembles that of Choice REIT to Loblaw, providing a solid foundation for investors .
CRT.UN Property Development
The trust has been actively expanding its portfolio through strategic developments. In 2018, CT REIT announced projects worth approximately CAD 99.94 million, including a new shopping center in Fort St. John, B.C., and the redevelopment of Orillia Square Mall in Ontario . These initiatives demonstrate CT REIT’s ability to create value in both urban and secondary markets.
CRT.UN Income Stability
CT REIT offers investors a reliable income stream with a distribution yield of around 6.5% . The trust has maintained a low payout ratio of 72.6%, indicating the sustainability of its distributions . In 2018, CT REIT announced a 4% increase in its quarterly distribution, reflecting its commitment to providing growing returns to unitholders .
Killam Apartment REIT (KMP.UN)
Image Source: Killam Apartment REIT
Killam Apartment REIT is one of Canada’s largest residential real estate investment trusts, with a portfolio valued at approximately CAD 7.36 billion [1]. The trust focuses on apartments and manufactured home communities across Canada, making it a significant player among Canadian REITs.
KMP.UN Multi-Family Housing Strategy
Killam’s strategy centers on increasing earnings from existing operations, expanding its portfolio, and developing high-quality properties in core markets . This approach has led to impressive growth, with total NOI increasing by 8.3% in 2023 .
KMP.UN Regional Diversification
The trust has been actively diversifying its portfolio geographically. In 2023, Killam completed 14 property dispositions for CAD 234.16 million, with 87% of the units sold located in Atlantic Canada . This aligns with Killam’s goal of increasing its presence in other Canadian regions.
KMP.UN Acquisition Approach
Killam’s expansion strategy includes accretive acquisitions, focusing on newer properties. In 2023, the trust added 415 new units through its development program, including projects in Kitchener, Halifax, and Calgary . These additions contribute to Killam’s earnings growth and help address Canada’s housing supply needs.
RioCan Real Estate Investment Trust (REI.UN)
Image Source: RioCan REIT
RioCan is one of Canada’s largest REITs, focusing on retail-centric, mixed-use properties in prime, high-density transit-oriented areas [1]. As of December 31, 2023, its portfolio comprised 188 properties with approximately 32.6 million square feet of net leasable area . The trust’s strategy centers on increasing earnings from existing operations, expanding its portfolio, and developing high-quality properties in core markets .
REI.UN Retail and Mixed-Use Properties
RioCan’s portfolio remains resilient, with retail properties making up about 86% of its annualized contractual gross rent . The trust’s retail committed occupancy improved by 0.50% to 98.4% compared to the previous year, highlighting the demand for well-located retail spaces . RioCan’s properties continue to attract strong and stable retail tenants, which comprise 87.4% of annualized net rent .
REI.UN Urban Redevelopment Projects
The trust is actively pursuing urban redevelopment projects, with a focus on mixed-use properties. One notable project is The Well in downtown Toronto, which includes over 1 million square feet of office space and 1,700 residential units . The retail component of The Well is 91% leased, with new additions like Lululemon and Sephora enhancing the tenant mix .
REI.UN Financial Resilience
RioCan maintains a strong financial position with CAD 2.22 billion of liquidity at the end of Q3 2023 [5]. The trust’s unencumbered assets totaled CAD 11.80 billion [5]. Despite challenging market conditions, RioCan continues to focus on capital management and strategic development to drive long-term value for unitholders [6].
H&R REIT (HR.UN)
Image Source: H&R REIT |
H&R REIT is one of Canada’s largest real estate investment trusts, with total assets of approximately CAD 14.30 billion as of June 30, 2024 [1]. The trust owns a diverse portfolio of high-quality residential, industrial, office, and retail properties across North America, comprising over 25 million square feet .
HR.UN Portfolio Transformation
H&R REIT is executing a strategic repositioning plan to create a simplified, growth-oriented business focused on residential and industrial properties . The trust aims to sell its office and retail properties as market conditions permit, with properties sold or under contract totaling approximately CAD 571.44 million in 2024 .
HR.UN Asset Quality
H&R REIT’s portfolio includes prime locations in Toronto, Montreal, Vancouver, and high-growth U.S. sunbelt and gateway cities . The trust is actively developing new properties, including two industrial buildings in Mississauga, ON, and two U.S. residential developments .
HR.UN Value Creation Strategy
H&R REIT’s strategy involves redevelopment and greenfield development in prime locations . The trust has also created Lantower Residential Real Estate Development Trust, which raised U.S. CAD 72.18 million to fund two residential projects in Florida [5].
First Capital REIT (FCR.UN)
Image Source: First Capital REIT
First Capital REIT is a leading Canadian REIT that owns, operates, and develops grocery-anchored, open-air centers in neighborhoods with strong demographics [1]. With a portfolio valued at over CAD 9.72 billion, First Capital focuses on high-quality retail spaces in prime locations .
FCR.UN Urban Retail Focus
First Capital’s strategy centers on acquiring, developing, and operating grocery-anchored shopping centers in urban areas . The REIT’s core portfolio boasts the highest in-place rents, lease renewal lifts, and population density among its peers .
FCR.UN Property Enhancement
The REIT actively invests in property development and redevelopment, with plans to invest approximately CAD 694.00 million over the next three years . This approach aims to enhance the value of its existing assets and create new opportunities for growth.
FCR.UN Dividend Policy
First Capital REIT offers a monthly dividend of CAD 0.10 per share, with a current yield of 4.81% . The REIT’s dividend payments have increased over the past decade, reflecting its commitment to delivering value to unitholders .
Conclusion
The Canadian REIT market offers investors a diverse range of opportunities across various real estate sectors. From retail-focused trusts like SmartCentres and RioCan to industrial specialists like Granite and Dream Industrial, these REITs provide exposure to different property types and geographic regions. The top Canadian REITs highlighted in this article have demonstrated resilience, strong dividend yields, and potential for growth, making them attractive options for investors seeking income and capital appreciation.
As we look ahead to 2025, Canadian REITs are well-positioned to benefit from ongoing trends in urbanization, e-commerce growth, and the need for quality housing. While each REIT has its unique strategy and focus, they all share a commitment to creating value for unitholders through strategic property management, development, and acquisitions. Investors considering Canadian REITs should carefully evaluate factors such as portfolio quality, occupancy rates, and financial stability to make informed decisions aligned with their investment goals.
FAQs
Is now a good time to invest in Canadian REITs?
Yes, with current interest rates stabilizing, Canadian REITs are becoming increasingly appealing. They offer consistent income and the potential for capital gains. Notably, the Canadian REIT index has risen by 6.5% in the first half of this year, indicating a positive trend.
What is the 5% rule in REIT investments?
The 5% rule for REITs stipulates that no more than 5% of a REIT’s total assets can be made up of securities from a single issuer, except in the case of a taxable REIT subsidiary. Additionally, a REIT can hold no more than 10% of the voting rights or value of securities from any one issuer, with the exception of its taxable REIT subsidiaries.
Can you explain the 90% rule for REITs?
To maintain REIT status, a company must primarily have its assets and income tied to real estate investment and must distribute at least 90% of its taxable income to its shareholders annually as dividends. This rule ensures that the income generated is consistently returned to investors.
References
[1] – https://ca.finance.yahoo.com/news/canadian-reits-top-real-estate-230000478.html
[2] – https://www.fool.ca/investing/top-canadian-reits-to-invest-in/
[3] – https://dividendearner.com/best-canadian-reits/
[4] – https://www.wealthprofessional.ca/news/industry-news/the-best-reits-to-invest-in-canada-for-2023/380850
[5] – https://www.ibisworld.com/canada/market-research-reports/real-estate-investment-trusts-industry/
[6] – https://www.fool.ca/2024/10/19/prediction-these-2-canadian-dividend-stocks-will-take-flight-in-2025/
