Best REIT Stocks In Canada For February 2024

Dividend Earner

Dividend Earner

Updated on

6 min read Affiliate Disclosure

Looking for some real estate investment trusts, or REITs for short, for your portfolio? Want the best REITs? The reality is that REITs can have different business goals and therefore more than one can fit your portfolio thus allowing you to better diversify your portfolio.

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

While the largest REIT is Canadian Apartment Properties REIT, it might not be the best fit for your portfolio. The best REITs to invest in Canada for a good and safe income would be CT REIT. So you see, the largest REIT isn’t always the best.

The last thing you want is a REIT that pays the same income year after year as it means you make less due to inflation.

Now, you might not be aware but over 34 Canadian REITs are trading on the Toronto Stock Exchange (TSX). However, only 20 have a market capitalization above $1B (Covid-19 and the recession impacted the value).

Continue reading but out of the 34 REITs, I have selected the top 4 REITs in no particular order.

  1. CT REIT – Retail REIT – The strength is that the tenants are mostly businesses from Canadian Tire Corporation and your thesis should hinge on the strength of Canadian Tire Corporation.
  2. InterRent REIT – Residential REIT – The rental market is strong due to high prices of home ownership and immigration is also strong.
  3. Granite REIT – Industrial REIT – A diversified portfolio across 7 countries providing space for big corporations.
  4. Canadian Apartment Properties REIT – Residential REIT – The rental market is strong due to the high prices of home ownership and immigration is also strong.

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 based on the services they provide. Each industry can be particularly appealing to you but it’s about the business and the location.

  • Residential REITs focus on residential properties like apartment buildings.
  • Industrial REITs focus on industrial properties for businesses in manufacturing.
  • Office REITs focus on office buildings where people work. How is work from home impacting this industry?
  • Retail REITs focus on retail properties handling direct-to-consumer sales like shopping malls.
  • Healthcare REITs primarily manage locations providing healthcare including retirement facilities.
  • Hotel & Motel REITs cover the short-term rental business.
  • Diversified REITs are covering multiple businesses as outlined above.

Knowing the industry they serve is quite important as it highlights what can influence their business. Is it commercial real estate or consumer-related for example? What’s the economy of the region driving those factors? That’s what defines the strength of the REITs.

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.

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 industry.

TickerKey Ticker Company Sector Industry Score Quote Market Cap P/E FPE EPS Yield PayoutRatio Payments Annual Distribution Chowder GrowthRating IncomeRating Tollbooth Ambassador Achiever Aristocrat King Country Graph SectorID IndustryID Grade MarketCapGroup
TSE:CAR.UN CAR.UN Canadian Apartment Properties REIT Real Estate REIT - Residential 24.34 49.55 8.31 0.00 0.00 0.00 2.9300 0.0000 12 1.45 4.8300 2 3 Tollbooth - Unregulated NO NO YES NO Canada 1 10 83 D Mid Cap
TSE:REI.UN REI.UN RioCan Real Estate REIT - Retail 36.87 18.13 5.44 35.96 35.96 0.00 5.9600 210.3600 12 1.08 5.9600 1 5 Tollbooth - Unregulated NO NO NO NO Canada 1 10 84 D Mid Cap
TSE:GRT.UN GRT.UN Granite REIT Real Estate REIT - Industrial 47.77 75.35 4.80 0.00 0.00 0.00 4.3800 0.0000 12 3.30 7.8200 6 4 Tollbooth - Unregulated NO YES YES NO Canada 1 10 81 C Mid Cap
TSE:CHP.UN CHP.UN Choice Properties REIT Real Estate REIT - Retail 47.71 13.77 4.51 15.03 15.03 0.00 5.4500 36.8600 12 0.75 5.6300 3 4 Tollbooth - Unregulated NO NO NO NO Canada 1 10 84 C Mid Cap
TSE:SMU.UN SMU.UN Summit Industrial Income REIT Real Estate REIT - Industrial 23.65 23.22 4.41 8.77 8.77 0.00 0.0000 21.3700 12 0.00 0.0000 2 1 Tollbooth - Unregulated NO NO NO NO Canada 1 10 81 D Mid Cap
TSE:DIR.UN DIR.UN Dream Industrial Real Estate REIT - Industrial 41.36 13.59 3.71 48.53 48.53 0.00 5.1500 233.4200 12 0.70 5.1500 3 4 Tollbooth - Unregulated NO NO NO NO Canada 1 10 81 C Mid Cap
TSE:BEI.UN BEI.UN Boardwalk REIT Real Estate REIT - Residential 25.28 72.55 3.58 6.38 6.38 0.00 1.6100 10.2100 12 1.17 1.6100 1 2 Tollbooth - Unregulated NO NO NO NO Canada 1 10 83 D Mid Cap
TSE:SRU.UN SRU.UN SmartCentres REIT Real Estate REIT - Retail 48.35 24.45 3.54 9.10 9.10 0.00 7.5700 55.3200 12 1.85 8.2400 2 6 Tollbooth - Unregulated NO NO YES NO Canada 1 10 84 C Mid Cap
TSE:FCR.UN FCR.UN First Capital REIT Real Estate REIT - Retail 26.26 16.54 3.51 0.00 0.00 0.00 5.2200 0.0000 12 0.86 5.2200 1 4 Tollbooth - Unregulated NO NO NO NO Canada 1 10 84 D Mid Cap
TSE:CSH.UN CSH.UN Chartwell Retirement Residences Real Estate REIT - Healthcare Facilities 34.24 11.89 2.86 0.00 0.00 0.00 5.1500 0.0000 12 0.61 6.4100 3 4 Tollbooth - Unregulated NO NO YES NO Canada 1 10 80 D Mid Cap
TSE:HR.UN HR.UN H&R REIT Real Estate REIT - Diversified 32.46 9.76 2.56 0.00 0.00 0.00 6.1500 0.0000 12 0.60 6.1500 1 5 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 D Mid Cap
TSE:KMP.UN KMP.UN Killam Apartment REIT Real Estate REIT - Residential 41.81 19.30 2.29 9.15 9.15 0.00 3.6300 29.5700 12 0.70 5.4700 4 3 Tollbooth - Unregulated NO NO YES NO Canada 1 10 83 C Mid Cap
TSE:AP.UN AP.UN Allied Properties REIT Real Estate REIT - Office 49.29 17.42 2.23 0.00 0.00 0.00 10.3300 0.0000 12 1.80 13.0500 5 8 Tollbooth - Unregulated NO NO YES NO Canada 1 10 82 C Mid Cap
TSE:IIP.UN IIP.UN InterRent REIT Real Estate REIT - Residential 44.40 13.55 1.96 0.00 0.00 0.00 2.7900 0.0000 12 0.38 8.8900 6 3 Tollbooth - Unregulated NO YES YES NO Canada 1 10 83 C Small Cap
TSE:CRT.UN CRT.UN CT REIT Real Estate REIT - Retail 59.37 14.33 1.55 38.30 38.30 0.00 6.2700 77.6100 12 0.90 10.2300 6 5 Tollbooth - Unregulated YES YES YES NO Canada 1 10 84 B Small Cap
TSE:CRR.UN CRR.UN Crombie REIT Real Estate REIT - Diversified 34.60 13.50 1.45 901.80 901.80 0.00 6.5900 6697.6100 12 0.89 6.5900 1 5 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 D Small Cap
TSE:PMZ.UN PMZ.UN Primaris REIT Real Estate REIT - Retail 42.09 13.60 1.31 21.35 21.35 0.00 6.0300 126.4500 12 0.82 6.0300 2 5 Tollbooth - Unregulated NO NO NO NO Canada 1 10 84 C Small Cap
TSE:NWH.UN NWH.UN Northwest Healthcare Properties REIT Real Estate REIT - Healthcare Facilities 34.42 4.34 1.06 0.00 0.00 0.00 8.2900 0.0000 12 0.36 8.2900 3 6 Tollbooth - Unregulated NO NO NO NO Canada 1 10 80 D Small Cap
TSE:SGR.UN SGR.UN Slate Grocery REIT Real Estate REIT - Retail 44.28 12.55 0.74 22.14 22.14 0.00 9.2600 202.5000 12 0.86 9.5700 4 7 Tollbooth - Unregulated NO NO NO NO Canada 1 10 84 C Small Cap
TSE:AX.UN AX.UN Artis REIT Real Estate REIT - Diversified 32.72 6.35 0.69 0.00 0.00 0.00 9.4500 0.0000 12 0.60 9.4500 2 7 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 D Small Cap
TSE:MI.UN MI.UN Minto Apartment REIT Real Estate REIT - Residential 33.61 16.87 0.67 0.00 0.00 0.00 2.9900 0.0000 12 0.51 7.6900 4 3 Tollbooth - Unregulated NO NO YES NO Canada 1 10 83 D Small Cap
TSE:MRG.UN MRG.UN Morguard North American Residential REIT Real Estate REIT - Residential 29.70 15.12 0.57 0.00 0.00 0.00 4.9000 0.0000 12 0.74 5.7200 2 4 Tollbooth - Unregulated NO NO NO NO Canada 1 10 83 D Small Cap
TSE:NXR.UN NXR.UN Nexus Industrial REIT Real Estate REIT - Industrial 59.46 8.16 0.56 6.72 6.72 0.00 7.8400 0.0000 12 0.64 7.8400 4 6 Tollbooth - Unregulated NO NO NO NO Canada 1 10 81 B Small Cap
TSE:D.UN D.UN Dream Office REIT Real Estate REIT - Office 33.38 10.22 0.46 0.00 0.00 0.00 9.7800 0.0000 12 1.00 9.7800 2 7 Tollbooth - Unregulated NO NO NO NO Canada 1 10 82 D Small Cap
TSE:APR.UN APR.UN Automotive Properties REIT Real Estate REIT - Diversified 53.15 10.29 0.41 6.43 6.43 0.00 7.8100 40.0400 12 0.80 7.8100 2 6 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 B Small Cap
TSE:PLZ.UN PLZ.UN Plaza Retail REIT Real Estate REIT - Retail 49.09 3.63 0.40 10.18 10.18 0.00 7.7100 78.3500 12 0.28 7.7100 2 6 Tollbooth - Unregulated NO NO NO NO Canada 1 10 84 C Small Cap
TSE:MRT.UN MRT.UN Morguard REIT Real Estate REIT - Diversified 23.91 5.38 0.35 0.00 0.00 0.00 4.4600 0.0000 12 0.24 4.4600 1 4 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 D Small Cap
TSE:PRV.UN PRV.UN PROREIT Real Estate REIT - Diversified 46.63 5.57 0.33 10.58 10.58 0.00 8.0800 81.7900 12 0.45 8.0800 4 6 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 C Small Cap
TSE:BTB.UN BTB.UN BTB REIT Real Estate REIT - Diversified 46.96 3.01 0.26 7.11 7.11 0.00 9.9700 70.2200 12 0.30 9.9700 3 7 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 C Micro Cap
TSE:FCD.UN FCD.UN Firm Capital Property Trust Real Estate REIT - Diversified 66.77 4.85 0.18 10.30 10.30 0.00 10.7200 111.8600 12 0.52 13.1600 7 8 Tollbooth - Unregulated YES YES NO NO Canada 1 10 120 A Micro Cap
TSE:TNT.UN TNT.UN True North Commercial REIT Real Estate REIT - Diversified 19.59 9.00 0.14 0.00 0.00 0.00 0.0000 0.0000 12 0.00 0.2000 1 1 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 D Micro Cap
TSE:MPCT.UN MPCT.UN Dream Impact Trust REIT Real Estate REIT - Diversified 36.46 6.44 0.11 0.00 0.00 -4.11 9.9300 0.0000 12 0.64 9.9300 3 7 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 D Micro Cap
TSE:HOT.UN HOT.UN American Hotel Income Properties REIT Real Estate REIT - Hotel & Motel 9.76 0.91 0.07 0.00 0.00 0.00 0.0000 0.0000 12 0.00 0.0000 0 1 Tollbooth - Unregulated NO NO NO NO Canada 1 10 121 D Micro Cap
TSE:SOT.UN SOT.UN Slate Office REIT Real Estate REIT - Diversified 23.67 0.86 0.07 0.00 0.00 0.00 0.0000 0.0000 12 0.00 0.0000 2 1 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 D Micro Cap
TSE:MR.UN MR.UN Melcor REIT Real Estate REIT - Diversified 51.26 4.09 0.05 8.53 8.53 0.00 11.7400 33.8200 12 0.48 11.7400 3 9 Tollbooth - Unregulated NO NO NO NO Canada 1 10 120 B Micro Cap
TSE:INO.UN INO.UN Inovalis REIT Real Estate REIT - Office 15.29 1.31 0.04 0.00 0.00 0.00 0.0000 0.0000 12 0.00 0.0000 0 1 Tollbooth - Unregulated NO NO NO NO Canada 1 10 82 D Micro Cap
TSE:HRR.UN HRR.UN Australian REIT Income Real Estate REIT - Specialty 27.81 7.61 0.00 21.32 21.32 0.00 8.6700 165.8800 12 0.66 8.6700 2 6 Tollbooth - Unregulated NO NO NO NO Canada 1 10 85 D Micro Cap

REIT Stocks vs REIT ETFs

There aren’t that many REIT stocks in Canada and you may be tempted to assess a REIT ETF (or mutual fund) as an alternative.

It depends on what you are looking for. I usually find that real estate investors who look into REITs are chasing the yield … Is that you? Some REITs have high dividend yield and that can be a risk, not an advantage.

If you chase yield, consider Covered Call ETFs as you may have less risk than exposing your portfolio to a small-cap REIT.

REIT Stocks vs Actual Real Estate

A real estate investment through a REIT is not the same as buying and owning a rental properly even if they both generate income.

The REIT while it holds income-producing assets is also working on expanding and managing loans and the management team may do a poor job which can hurt the stock. So you put your trust in a management team and the stock market instead of the actual real estate market.

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)

I am favouring residential REIT due to the shortage of homes and high immigration. One key metric to focus on when reviewing REITs is their occupancy rate.

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. So we start with the largest REITs. They can have funds to expand and play in the big cities. That leaves us with the following REITs.

While the largest REIT in Canada might not be the best, many are small and bring small-cap exposure to your portfolio. It might not be what you want.

Ticker Ticker Company Market Cap P/E Yield Aristocrat Graph SectorID IndustryID
CAR.UN TSE:CAR.UN Canadian Apartment Properties REIT 8.31 0.00 2.93 YES 1 10 83
REI.UN TSE:REI.UN RioCan 5.44 35.96 5.96 NO 1 10 84
GRT.UN TSE:GRT.UN Granite REIT 4.80 0.00 4.38 YES 1 10 81
CHP.UN TSE:CHP.UN Choice Properties REIT 4.51 15.03 5.45 NO 1 10 84
SMU.UN TSE:SMU.UN Summit Industrial Income REIT 4.41 8.77 0.00 NO 1 10 81
DIR.UN TSE:DIR.UN Dream Industrial 3.71 48.53 5.15 NO 1 10 81
BEI.UN TSE:BEI.UN Boardwalk REIT 3.58 6.38 1.61 NO 1 10 83
SRU.UN TSE:SRU.UN SmartCentres REIT 3.54 9.10 7.57 YES 1 10 84
FCR.UN TSE:FCR.UN First Capital REIT 3.51 0.00 5.22 NO 1 10 84
CSH.UN TSE:CSH.UN Chartwell Retirement Residences 2.86 0.00 5.15 YES 1 10 80
HR.UN TSE:HR.UN H&R REIT 2.56 0.00 6.15 NO 1 10 120
KMP.UN TSE:KMP.UN Killam Apartment REIT 2.29 9.15 3.63 YES 1 10 83
AP.UN TSE:AP.UN Allied Properties REIT 2.23 0.00 10.33 YES 1 10 82
IIP.UN TSE:IIP.UN InterRent REIT 1.96 0.00 2.79 YES 1 10 83
CRT.UN TSE:CRT.UN CT REIT 1.55 38.30 6.27 YES 1 10 84
CRR.UN TSE:CRR.UN Crombie REIT 1.45 901.80 6.59 NO 1 10 120
PMZ.UN TSE:PMZ.UN Primaris REIT 1.31 21.35 6.03 NO 1 10 84
NWH.UN TSE:NWH.UN Northwest Healthcare Properties REIT 1.06 0.00 8.29 NO 1 10 80

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

Ticker Ticker Company Market Cap P/E Yield Aristocrat Graph SectorID IndustryID
CAR.UN TSE:CAR.UN Canadian Apartment Properties REIT 8.31 0.00 2.93 YES 1 10 83
REI.UN TSE:REI.UN RioCan 5.44 35.96 5.96 NO 1 10 84
CHP.UN TSE:CHP.UN Choice Properties REIT 4.51 15.03 5.45 NO 1 10 84
BEI.UN TSE:BEI.UN Boardwalk REIT 3.58 6.38 1.61 NO 1 10 83
SRU.UN TSE:SRU.UN SmartCentres REIT 3.54 9.10 7.57 YES 1 10 84
FCR.UN TSE:FCR.UN First Capital REIT 3.51 0.00 5.22 NO 1 10 84
HR.UN TSE:HR.UN H&R REIT 2.56 0.00 6.15 NO 1 10 120
KMP.UN TSE:KMP.UN Killam Apartment REIT 2.29 9.15 3.63 YES 1 10 83
AP.UN TSE:AP.UN Allied Properties REIT 2.23 0.00 10.33 YES 1 10 82
IIP.UN TSE:IIP.UN InterRent REIT 1.96 0.00 2.79 YES 1 10 83
CRT.UN TSE:CRT.UN CT REIT 1.55 38.30 6.27 YES 1 10 84
CRR.UN TSE:CRR.UN Crombie REIT 1.45 901.80 6.59 NO 1 10 120
PMZ.UN TSE:PMZ.UN Primaris REIT 1.31 21.35 6.03 NO 1 10 84

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 are.

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

The TOP 4 Canadian REITs

Note that screening stocks for income requires unique dividend data. Not many screeners focus on dividend data and dividend strength. You should consider a screener such as Dividend Snapshot Screeners.

TSE GRT UN SMALL

Granite REIT

tse:grt.un | Real Estate | REIT - Industrial

TSE IIP UN SMALL

InterRent REIT

tse:iip.un | Real Estate | REIT - Residential

TSE CAR UN SMALL

Canadian Apartment Properties REIT

tse:car.un | Real Estate | REIT - Residential

TSE CRT UN SMALL

CT REIT

tse:crt.un | Real Estate | REIT - Retail

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 strengths. You get to understand the strength of their sector.

Which are the best Canadian REITs? Well, it 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 value growth? Some of them have it. Do you want a 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 before making a purchase. The account you decided to use has a big tax impact.