Best Canadian REITs for October 2021

Looking for a REIT for your portfolio? Want the best REIT? The reality is that REITs can have different focuses and therefore more than one can fit the bill thus allowing you to diversify your portfolio.

In general, you are looking for income with a REIT and not a stock like Netflix, Amazon or Shopify. During your search for income, don’t ignore the potential for distribution growth to keep up with inflation.

While the largest REIT is Canadian Apartment Properties – Retail REIT – The stength is that the tenants are mostly businesses from Loblaw – Diversified REIT – It’s a broad stroke holding which can leverage strength in various markets to make up for weaknesses

  • SmartCentres REIT – Retail REIT – Are stripped mall dead? Not really as you still need to go to some places for various items. Outlet malls, for example, are a perfect fit for this REIT. You want the best location.
  • Allied Properties REIT – Office REIT – A strong portfolio of office and retail properties in the downtown core of all major cities. Office space is not going away, it’s just going to be different and they are positioned to adjust.
  • List of all Canadian REITs

    Let’s start by looking at the full list of REITs and then drill down from there. The Canadian REIT sector has 7 industries to which a REIT belongs to based on the services they provide.

    Knowing the industry they serve is quite important as it highlights what can influence their business.

    I admit that I was pretty surprised to find this many REITs in total. That’s a lot of real estate income trusts to filter through. Choice Properties REIT is one of the most recent REIT created by Loblaw out of its real estate assets.

    The list below for reference is sorted by market capitalization rather than yield. A REIT has a high yield just by the nature of the REIT and I am not looking for the REIT that pays the most but the REIT that will serve me best in the following criteria:

    • [Quantitative] Decent Income Distribution – Between 4% and 6%
    • [Quantitative] Consistent Payout – 3, 5 and 10 year averages should be consistent
    • [Quantitative] Distribution Growth Potential – At or above inflation is good enough for a REIT
    • [Qualitative] Stock Growth Potential – Can it grow and what is the strategy?

    Most Canadian REIT investors will have the same criteria with different priorities but they are pretty standard. Below is the breakdown of all Canadian REITs by industries.

    TickerKey Ticker Company Sector Industry Score Quote Market Cap P/E FPE EPS Yield Raw PayoutRatio Payments Annual Distribution Chowder GrowthRating IncomeRating Tollbooth Ambassador Achiever Aristocrat King Country Graph
    TSE:CAR.UN CAR.UN Canadian Apartment Properties REIT Real Estate REIT - Residential 50.88 60.31 10.47 7.76 7.76 7.77 2.2900 17.7000 12 1.38 4.7700 1 229 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:REI.UN REI.UN RioCan Real Estate REIT - Retail 56.23 22.04 7.02 16.09 16.09 1.37 4.3600 87.6000 12 0.96 4.7800 1 436 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:GRT.UN GRT.UN Granite REIT Real Estate REIT - Industrial 46.00 89.02 5.86 6.87 6.87 12.96 3.3700 21.9000 12 3.00 7.4600 1 337 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:AP.UN AP.UN Allied Properties REIT Real Estate REIT - Office 62.94 43.73 5.57 16.85 16.85 2.60 3.8900 64.5000 12 1.70 6.1400 1 389 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:CHP.UN CHP.UN Choice Properties REIT Real Estate REIT - Retail 38.44 15.06 4.92 45.35 45.35 0.33 4.9200 102.5000 12 0.74 5.3700 1 492 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:HR.UN HR.UN H&R REIT Real Estate REIT - Diversified 50.30 16.37 4.78 7.65 7.65 2.14 4.2200 32.2000 12 0.69 0.0000 1 422 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:SRU.UN SRU.UN SmartCentres REIT Real Estate REIT - Retail 55.40 30.32 4.40 19.76 19.76 1.53 6.1000 100.6000 12 1.85 7.9000 1 610 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:FCR.UN FCR.UN First Capital REIT Real Estate REIT - Retail 44.70 17.98 3.94 13.31 13.31 1.35 2.4000 47.4000 12 0.43 2.4000 1 240 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:SMU.UN SMU.UN Summit Industrial Income REIT Real Estate REIT - Industrial 32.63 21.26 3.60 3.97 3.97 5.35 2.6500 9.9000 12 0.56 0.0000 1 265 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:CSH.UN CSH.UN Chartwell Retirement Residences Real Estate REIT - Healthcare Facilities 27.94 13.40 2.89 0.00 0.00 -0.02 4.5700 0.0000 12 0.61 3.8300 1 457 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:NWH.UN NWH.UN Northwest Healthcare Properties REIT Real Estate REIT - Healthcare Facilities 50.98 12.99 2.84 9.04 9.04 1.44 6.1600 49.9000 12 0.80 6.1600 1 616 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:IIP.UN IIP.UN InterRent REIT Real Estate REIT - Residential 59.89 17.43 2.43 9.70 9.70 1.80 1.8700 17.3000 12 0.33 10.6400 1 187 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:KMP.UN KMP.UN Killam Apartment REIT Real Estate REIT - Residential 48.31 21.11 2.32 9.12 9.12 2.31 3.2200 26.0000 12 0.68 5.1800 1 322 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:BEI.UN BEI.UN Boardwalk REIT Real Estate REIT - Residential 35.28 47.05 2.23 0.00 0.00 -3.01 2.1300 0.0000 12 1.00 0.0000 1 213 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:CUF.UN CUF.UN Cominar REIT Real Estate REIT - Diversified 41.00 11.22 2.07 0.00 0.00 -0.53 3.2100 0.0000 12 0.36 0.0000 1 321 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:CRT.UN CRT.UN CT REIT Real Estate REIT - Retail 22.90 17.53 1.85 37.25 37.25 0.47 4.7800 51.5000 12 0.84 8.3100 1 478 Tollbooth - Unregulated NO NO YES NO Canada 1
    TSE:CRR.UN CRR.UN Crombie REIT Real Estate REIT - Diversified 27.40 18.24 1.77 0.00 0.00 -0.35 4.8800 0.0000 12 0.89 4.8700 1 488 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:AX.UN AX.UN Artis REIT Real Estate REIT - Diversified 49.39 11.69 1.53 4.47 4.47 2.61 5.1300 21.6000 12 0.60 5.1300 1 513 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:D.UN D.UN Dream Office REIT Real Estate REIT - Office 55.48 22.10 1.12 14.29 14.29 1.55 4.5200 56.4000 12 1.00 0.0000 1 452 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:MI.UN MI.UN Minto Apartment REIT Real Estate REIT - Residential 48.67 24.08 0.88 0.00 0.00 0.00 1.8900 0.0000 12 0.46 1.8900 1 189 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:SGR.UN SGR.UN Slate Grocery REIT Real Estate REIT - Retail 39.14 13.55 0.79 0.00 0.00 0.00 8.0300 44.6000 12 0.86 15.3400 1 803 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:MRG.UN MRG.UN Morguard North American Residential REIT Real Estate REIT - Residential 34.68 18.07 0.70 10.41 10.41 1.74 3.8700 25.4000 12 0.70 7.0000 1 387 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:TNT.UN TNT.UN True North Commercial REIT Real Estate REIT - Diversified 41.26 7.53 0.65 19.32 19.32 0.39 7.8900 151.7000 12 0.59 7.8900 1 789 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:APR.UN APR.UN Automotive Properties REIT Real Estate REIT - Diversified 58.73 12.89 0.50 7.23 7.23 1.78 6.2400 38.9000 12 0.80 6.0700 1 624 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:PLZ.UN PLZ.UN Plaza Retail REIT Real Estate REIT - Retail 54.59 4.56 0.47 9.32 9.32 0.49 6.1300 57.5000 12 0.28 8.6300 1 613 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:MPCT.UN MPCT.UN Dream Impact Trust REIT Real Estate REIT - Diversified 48.24 6.69 0.44 0.00 0.00 0.00 5.9700 0.0000 12 0.40 5.9800 1 597 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:MRT.UN MRT.UN Morguard REIT Real Estate REIT - Diversified 45.71 6.04 0.40 0.00 0.00 -2.49 3.9700 0.0000 12 0.24 0.0000 1 397 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:SOT.UN SOT.UN Slate Office REIT Real Estate REIT - Diversified 48.58 5.42 0.37 8.32 8.32 0.65 7.3700 57.4000 12 0.40 0.0000 1 737 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:PRV.UN PRV.UN PRO REIT Real Estate REIT - Diversified 46.77 7.05 0.33 17.25 17.25 0.41 6.3800 99.0000 12 0.45 6.3800 1 638 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:DIR.UN DIR.UN Dream Industrial Real Estate REIT - Industrial 40.96 16.63 0.32 7.56 7.56 2.20 4.2100 28.8000 12 0.70 4.2100 1 421 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:HOT.UN HOT.UN American Hotel Income Properties REIT Real Estate REIT - Hotel & Motel 35.66 4.13 0.32 0.00 0.00 -0.77 0.0000 0.0000 12 0.00 0.0000 1 0 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:INO.UN INO.UN Inovalis REIT Real Estate REIT - Office 48.04 9.54 0.31 0.00 0.00 -0.27 8.6500 0.0000 12 0.83 8.7500 1 865 Tollbooth - Unregulated NO NO NO NO Canada 1
    TSE:BTB.UN BTB.UN BTB REIT Real Estate REIT - Diversified 61.31 4.10 0.30 14.17 14.17 0.29 7.3200 102.4000 12 0.30 0.5200 1 732 Tollbooth - Unregulated NO NO NO NO Canada 1

    Picking the BEST Canadian REITs

    To find the best Canadian REITs fitting my criteria, I choose to go through the following steps.

    • Sort the REITs based on the Chowder Score (Yield and Dividend Growth)
    • Sort the REITs by Dividend Increases (Consistency in dividend increases is good)

    Narrow Down Your Canadian REITs

    I decided to eliminate the little players. They may well have a lot of growth but I want an established REIT of at least $1B in market capitalization. With that criteria, they can have funds to expand and play in the big cities. That leaves us with the following REITs

    For the purpose of my selection, I will go with $1B as a minimum market capitalization. I am going to exclude the industrial REIT industry as I don’t understand that industry. For example, the healthcare REIT industry is also not an industry I understand.

    There is definitely a growing market but I am not sure how the business model works. It leaves me with the list below sorted by market capitalization.

    Compare Your Selected Canadian REITs

    Now comes the hard part. The easy filtering is done. I could easily remove those with a yield under 4% but I am curious if they grow their yield and what the properties actually are.

    If you have Wal-Mart as a renter, the chances of long-term business are much stronger than having an arbitrary small business. Personally, I have invested in both REI.UN and CUF.UN in the past. See my portfolio holdings for details.

    The Best 4 Canadian REITs

    1. Choice Properties REIT

    CHP.UN - Choice Properties REIT Choice Properties is a Real Estate Investment Trust that owns, manages and develops retail and commercial real estate across Canada. Choice Properties was spun out by Loblaw Cos. Ltd. in 2013 and the grocery chain is its biggest tenant today.

    The REIT’s properties are well located across Canada majorly in the largest markets. Approximately 57% of the portfolio’s base rent is generated from large urban markets, mainly in Toronto, Calgary, Vancouver, and Montreal.

    The REIT’s portfolio includes 599 retail properties, 113 industrial properties, 16 office complexes, three multi-family residential buildings, and 22 development properties.

    Key Investment Data

    • Ticker: TSE:CHP.UN
    • Sector: Real Estate
    • Industry: REIT - Retail
    • Market Cap: 4.82B
    • P/E: 44.30
    • Dividend Yield: 5.03%
    • Payout Ratio (TTM): 102.50%

    2. H&R REIT

    HR.UN - HR Reit H&R REIT has interests in a portfolio of office, retail, industrial and residential properties spanning across 41 million square feet in North America. As one of Canada’s largest REITs, H&R has assets worth $14.4 billion. It enters into long-term lease including rent escalations with creditworthy tenants.

    By asset type, H&R’s Office segment is the largest of the four segments and holds a portfolio of single tenant and multi-tenant office properties across North America, while its retail segment holds a portfolio of enclosed shopping centres, single tenant retail properties and multi-tenant retail centers throughout Canada and 16 single tenant retail properties in the USA.

    By geographic region, Ontario and the USA account for 33% each of total fair value, followed by Alberta (25%) and other Canadian provinces (9%). H&R REIT’s focus on diversified portfolio of high quality investment properties in North America with quality tenants ensure stable cash flows.

    Key Investment Data

    • Ticker: TSE:HR.UN
    • Sector: Real Estate
    • Industry: REIT - Diversified
    • Market Cap: 4.66B
    • P/E: 7.56
    • Dividend Yield: 4.27%
    • Payout Ratio (TTM): 32.20%

    3. SmartCentres REIT

    SRU.UN - Smart Reit SmartCentres REIT is Canada’s largest developer and operator of unenclosed shopping centers. It engages in the acquisition, asset management, planning, development, leasing, operations, property management and construction of properties.

    SmartCentres’ growing platform includes value-oriented unenclosed shopping centers and destination outlets. The REIT currently has 3,100 tenants and 34 million square feet of leasable space available across 150 locations across Canada.

    SmartCentres has long enjoyed a reputation for consistent performance, making it one of Canada’s premier real estate investment trusts. Over the years, SmartCentres has developed a strong focus on retail development and operation. Its expertise has grown to include a variety of urban, mixed-use, residential and industrial developments, including a number of master planned communities.

    Key Investment Data

    • Ticker: TSE:SRU.UN
    • Sector: Real Estate
    • Industry: REIT - Retail
    • Market Cap: 4.38B
    • P/E: 19.72
    • Dividend Yield: 6.12%
    • Payout Ratio (TTM): 100.60%

    4. Allied Properties REIT

    AP.UN - Allied REIT Allied owns 160 urban properties (132 rental properties, eight development properties, and 11 ancillary parking facilities) spanning across 11 million square feet in Canada. Its portfolio comprises of a balanced mix of new and historical buildings.

    The firm focuses on urban intensification and has a presence in Canada’s major cities such as Toronto, Montreal, Calgary, Vancouver, Ottawa, Edmonton, and Kitchener. Allied’s segments can be divided into urban data centers (18% of 2018 NOI), western (12%), eastern (25%) and central (45%).

    Office space accounts for a larger portion of its NOI at nearly 69%, followed by urban data centers (18%), retail (8%) and parking (5%). Allied also has a subsidiary, Allied Properties Management LP which provides property management and other fee-based services.

    Key Investment Data

    • Ticker: TSE:AP.UN
    • Sector: Real Estate
    • Industry: REIT - Office
    • Market Cap: 5.18B
    • P/E: 15.67
    • Dividend Yield: 4.18%
    • Payout Ratio (TTM): 64.50%

    Canadian REIT ETFs

    If you find it too difficult to invest in a specific REIT, you can always buy a Canadian REIT ETF. Be sure to look at their holdings as they may only hold a subset of the REITs.

    • iShares S&P/TSX Capped REIT Index Fund 
    • BMO Equal Weight REITs Index ETF 
    • Vanguard FTSE Canadian Capped REIT Index ETF 

    The above mentioned ETFs are probably the best Canadian REIT ETFs at this point in time. However, be on the lookout as most financial institutions are entering the ETF market and they should all be creating their own in due time.

    Canadian REITs Summary

    I will admit that it’s impressive to see the number of REITs available in Canada. I was pretty surprised at the business of H&R REIT with their corporate tenants. In the past, when I first purchased REITs, I had no understanding of the AFFO and since I learned about that metric, it changed how I evaluate REITs forever.

    You HAVE to read their financial report for the year-end. It’s not just raw numbers. It highlights their businesses and strength. You get to understand the strength of their sector.

    Which is the best Canadian REITs? Well, it really depends on your goals. Do you want to see dividend growth? Some of them have it. Do you want to only pick below 90% AFFO payout? Some of them fit the bill. Do you want to see growth in value? Some of them have it. Do you want high income? Some of them have it.

    As you can see, there isn’t just one Best Canadian REIT. There is a best Canadian REIT for your portfolio based on your criteria. Are you nearing retirement? Are you starting and diversifying?

    If you are new to REIT investing, you need to understand REIT taxation prior to making a purchase. The account you decided to use has a big tax impact.

    Build Your OWN Top List

    My portfolio is generating over 12% annual returns since 2009. It's not from the beginning of the year or from 2019, it's from 2009 !!! That's a consistent return which means using the rule of 72, I double my portfolio every 6 years.

    My approach is simple but you need key data that I have cultivated with the Dividend Snapshot Screeners. No other investment services provide you with easy to understand data but also actionable data. No hidden magic.

    In fact, I have tried all of the investment services for dividend investors like a crash test dummy of investment services. Just ask me, and you'll learn why there was nothing I could use out there and build the Dividend Snapshot Screeners.

    DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

    DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.