16 Best REITs In Canada (May 2022)

January 31, 2022
Blog

If you’re looking to build a fixed-income portfolio, adding Real Estate Investment Trusts should be at the top of your list. REITs have a history of being at the top of best-performing asset classes – consistently outperforming even the S&P 500. REIT ETFs are an inexpensive way to gain exposure to this market.

To start investing in REITs, all you need is a brokerage account – or better yet, a robo advisor. There are many robo advisors out there, but only one that consistently outperforms all others: Wealthsimple. With its no-minimum starting investment, highly-rated app, low fees, and open access to financial advisors on-demand, it’s no wonder Wealthsimple remains Canada’s best robo advisor.

What Are REITs?

Real Estate Investment Trusts (REITs) are funds that invest in real estate, by owning, financing, or managing income-generating properties. They can achieve this in two ways, by investing directly in properties and earning recurrent income in the form of rental payments, – or by loaning funds to real estate developers. In this case, the earnings come from interests on these loans.

How Can You Pick A Reit?

Here are three key factors to consider when buying them.

  1. Good Management: Examine the company’s management, track record, and compensation. The manager’s ability to select appropriate investments and methods is strongly related to financial success and asset appreciation. It will also be working for your best interests if its payment is based on performance.
  2. Diversified Investments: You need to make sure it’s a well-diversified REIT. You don’t want to be heavily invested in just commercial real estate if the occupancy rate of your portfolio is causing problems. Diversification usually implies that the trust has access to capital and has development plans.
  3. High Earnings: Before investing in it, check out a REIT’s funds from operations and cash available for distribution or dividends. They assess its overall success and how much money is sent to investors.

Here are the best real estate investment trusts Canada has to offer.

Best Retail REITs In Canada

#1 SmartCentres REIT (SRU)

Number of Properties114 (3,500+ tenants)
12 Month Yield6.0%
Occupancy Rate97.6%
Leasable Space35 million sq. feet
Assets Under Management$12 billion

SmartCentres Real Estate Investment Trust is one of the largest REITs in Canada, with a diversified portfolio of 174 strategically located homes in cities all around the country. SmartCentres has $11.5 billion in assets and owns 3,500 acres of income-producing value-oriented retail and first-class office space with 97.6 percent occupancy.

SmartCentres is always looking for new retail locations. Currently, Project 512, a $15.2 billion development plan, is their main focus. This program includes rental flats, condominiums, retirement homes, and hotels.

#2 Plaza Retail Real Estate (PLZ)

Number of Properties257
12 Month Yield5.93%
Occupancy Rate96.5%
Leasable Space1.1 million sq. feet
Assets Under Management$1.1 billion

Plaza Retail Real Estate is a multinational real estate corporation that focuses on Ontario, Quebec, and Atlantic Canada. The majority of Plaza’s portfolio comprises open-air malls and retail stores.

Plaza concentrates on developing and reinvesting in rental properties without reducing its unitholders’ value. With over $1.1 billion in total assets, Plaza provides excellent returns and has a very strong presence in eastern Canada.

#3 Crombie REIT (CRR)

Number of Properties284
12 Month Yield5.1%
Occupancy Rate95.6%
Leasable Space18.1 million sq. feet
Assets Under Management$5.3 billion

Crombie REIT prides itself in the fact that, since its inception in 1964, it has provided solid returns on its investments through commercial, retail, and residential developments, and has helped build and engage with the communities.

Recently, Crombie completed their first residential project in Vancouver’s West End, The Zephyr. It features over 300 luxury rental units, with excellent views of downtown Vancouver, the North Shore mountains, and the English Bay, partnership with a well-established development firm, Westbank. Some of the largest commercial chains working with them are Scotiabank, BC Liquor Store, and Safeway Stores.

#4 First Capital Realty (FCR)

Number of Properties146
12 Month Yield2.3%
Occupancy Rate96.1%
Leasable Space22.5 million sq. feet
Assets Under Management$10.1 billion

First Capital Realty invests in the future of Canada by developing active city neighborhoods that provide value for businesses and communities. They own interests in 146 communities with a leasable area of 22.5 million square feet and a total value of $10.1 billion.

First Capital has worked to increase sustainability and is among the few REITs that prioritize green, eco-friendly buildings; over 80% of its portfolio is BOMA Best certified. It complies with various Environmental, Social and Governance programs and expects to achieve net-zero emissions by 2050.

#5 BTB REIT (BTB)

Number of Properties75
12 Month Yield7.50%
Occupancy Rate93.4%
Leasable Space6.0 million sq. feet
Assets Under Management$1.13 billion

BTB is a large investment trust listed in the Toronto Stock Exchange, with properties in western and eastern Canada. BTB has 75 properties in its portfolio, with a total leasable area of 6 million square feet and a total asset value of more than $1 billion.

BTB anticipates pursuing a dual-market strategy coupled with income-yielding office, retail, and industrial properties represents an interesting strategy for investors. So, it focuses on both primary and secondary markets and the retail and industrial sectors.

#6 PRO Real Estate Investment (PRV)

Number of Properties120
12 Month Yield6.6%
Occupancy Rate98.4%
Leasable Space6.6 million sq. feet
Assets Under Management$4 billion

Founded in 2013, PRO Real Estate Investment Trust is a Canadian REIT with a strong presence across ten Canadian provinces. Its portfolio consists of commercial and industrial properties, and it boasts a very high occupancy rate of 98.4% across all assets.

Pro Reit is directed by a seasoned management team with significant real estate industry and capital markets expertise. With over 70 years of experience in property acquisition, management, and financing, the team has completed more than $4 billion in commercial real estate transactions.

#7 Granite Real Estate (GRT)

Number of Properties135
12 Month Yield3.2%
Occupancy Rate99.6
Leasable Space55.9 million sq. feet
Assets Under Management

Granite REIT is a Canadian real estate investment trust that owns, develops, and manages industrial properties across North America and Europe. Their portfolio comprises more than 135 properties with 55.9 million square feet of leased space.

Granite REIT aims to deliver the greatest possible return for its investors while creating consistent and increasing cash flow. Granite REIT (GRT) trades on the New York Stock Exchange and the Toronto Stock Exchange.

#8 Nexus Real Estate Investment (NXR)

Number of Properties107
12 Month Yield4.8%
Occupancy Rate93.0%
Leasable Space12 million sq. feet
Assets Under Management$2.1 billion

Nexus Industrial REIT is a Canadian real estate investment trust focused on acquiring and owning industrial properties. Nexus Real Estate Investment Trust’s units are listed on the Toronto Stock Exchange.

Nexus is always looking for ways to grow, and it currently has a unique and profitable relationship with a large real estate investment company, RFA Capital, and will continue to expand across Canada and other countries, including other North American markets.

#9 Cominar Real Estate Investment (CUF)

Number of Properties77
12 Month Yield1.8%
Occupancy Rate91.7%
Leasable Space11.8 million sq. feet
Assets Under Management$5.7 billion

Cominar is a Canadian REIT that owns and manages a portfolio of Quebec’s office, retail, and residential properties. Their objective is to create living spaces that are appropriate for people’s needs, and they accomplish this by designing living areas that are suited to their unique requirements.

Cominar prioritizes quality and client satisfaction and prides on the fact that it responds quickly to service calls for cleaning or cleaning services, maintenance and repairs, and emergency assistance.

#10 Morguard Real Estate (MRT)

Number of Properties46
12 Month Yield4.5%
Occupancy Rate91.0%
Leasable Space8.3 million sq. feet
Assets Under Management$2.5 billion

Morguard is a Canada-only Real Estate Investment Trust. It is listed on the Toronto Stock Exchange (TSX), and its primary goal is to invest in a Canadian real estate portfolio of good quality assets, then actively manage the portfolio to generate steady returns for Unitholders through a reliable and increasing cash flow.

The portfolio’s main focus is on well-located, high-quality corporate office properties in the largest cities, regional-local and community shopping malls, and a small number of industrial properties.

#11 Morguard North American Residential (MRG)

Number of Properties43
12 Month Yield4.1%
Occupancy Rate96%
Leasable Space
Assets Under Management$3.5 billion

Morguard North American Residential REIT is a separate REIT from the previous one but with strong connections. Also listed on the TSX, this REIT was established to own a diversified portfolio of residential rental properties in Canada and the United States. The company’s primary goals are to increase the value of its portfolio and provide tax-efficient dividends to Unitholders.

Since its inception in 2012, MRG has more than doubled its portfolio size to over 12,000 suites at 43 multi-suite residential properties in North America. The real estate portfolio comprises 27 US residential communities spread throughout the US and 16 Canadian residential apartments and communities located in Alberta and Ontario.

#12 Minto Apartment Real Estate Investment (MI)

Number of Properties29
12 Month Yield2.2%
Occupancy Rate91.5%
Leasable Space
Assets Under Management1.1 billion

Minto Apartment REIT is a Canadian real estate investment trust that owns and manages a collection of 29 multi-residential rental homes spread throughout the country. It has a strong presence in Toronto, Ottawa, and Edmonton, where it owns urban residential properties with very high occupancy rates.

Minto Apartment REIT’s main focus is long-term investments in urban centers, and it accomplishes this with a management team with a long record of success. They have invested over $78 million in various up-and-coming properties in the past three years.

#13 Melcor Developments LTD (MRD)

Number of Properties59
12 Month Yield2.8%
Occupancy Rate
Leasable Space7.5 million sq. feet
Assets Under Management$2.3 million

Melcor is a real estate asset management and development firm that converts raw land into high-quality finished products, including both residential and commercial built forms, from beginning to end.

Melcor Developments designs and builds high-tech industrial, retail, and suburban office spaces. As of 2021, they’ve developed over 2 million commercial projects and are among the most prolific developers in Alberta and Edmonton, and they operate over 7.5 million square feet in leasable space. They take a more holistic approach than other REITs; This approach includes building communities where people live, offices where they work, retail centers and shops, and golf courses where they play.

#14 Automotive Properties (APR)

Number of Properties72
12 Month Yield5.7%
Occupancy Rate
Leasable Space2.7 million sq. feet
Assets Under Management$3.8 billion

The Automotive Properties REIT is a real estate investment trust that invests in income-producing automobile dealership properties in important Canadian cities.

In 2021, the automotive retail sector in Canada generated sales of $176 billion, accounting for approximately 25% of all retail sales across Canada. APR seeks to capitalize on this and maintain its track record of strong revenues and profit margins.

This REIT is considered a defensive class since they represent a significant and critical element of the car companies’ brand and distribution system.

#15 NorthWest Healthcare Properties (NWH)

Number of Properties192
12 Month Yield5.4%
Occupancy Rate
Leasable Space16.2 million sq. feet
Assets Under Management$5.3 billion

NorthWest Healthcare develops important facilities dedicated to healthcare; from research to delivery of services, it is a vital part of many communities.

Founded in 2004, NorthWest has partners across the top healthcare providers and operates almost 200 healthcare properties. Despite having a stronger presence in Canada and North America, it also has investments in Australia, Brazil, Germany, the Netherlands, and the UK, for 16.2 million square feet of leasable area.

It is the largest non-governmental operator of medical office buildings and healthcare facilities in Canada, with over 56 properties.

#16 Chartwell Retirement Residences (CSH)

Number of Properties200
12 Month Yield4.9%
Occupancy Rate
Leasable Space
Assets Under Management$2.67 billion

Chartwell is an open-ended real estate trust that owns and operates a full range of senior housing communities, from independent supportive living to long-term care.

Chartwell is Canada’s largest senior living company with over 200 excellent retirement communities in four provinces, including properties under development.

Before Investing In REITs

As with any investment, you should do your homework before deciding to invest in a REIT. REIT income is made up of dividend payments and capital gains, so REITs must develop their revenue and earnings steadily for their dividends to rise over time.

Here are three factors to consider when investing in REITs:

  • Who Is Managing The Fund: Check out the management’s track record, as well as how it’s compensated. The manager’s capacity to choose the appropriate investments and strategies is related to its profitability and asset appreciation. It will be working for your best interests if its compensation is performance-based.
  • How Diversified Is The Fund: You should buy a well-diversified REIT if you want to minimize your risk of losing money in real estate markets. So, you don’t want commercial real estate just because occupancy rates are declining; diversification generally entails having access to adequate capital to finance future growth initiatives and properly leverage the trust for greater returns.
  • How Much Is Paid To Investors: Look at a REIT’s adjusted funds from operations and cash available for distribution or dividends before you invest in it. They evaluate the company’s performance and how much money is sent to investors.

Conclusion

If you’re looking to build a fixed-income portfolio, adding Real Estate Investment Trusts should be at the top of your list. REITs have a history of being at the top of best-performing asset classes – consistently outperforming even the S&P 500. REIT ETFs are an inexpensive way to gain exposure to this market.

To start investing in REITs, all you need is a brokerage account – or better yet, a robo advisor. There are many robo advisors out there, but only one that consistently outperforms all others: Wealthsimple. With its no-minimum starting investment, highly-rated app, low fees, and open access to financial advisors on-demand, it’s no wonder Wealthsimple remains Canada’s best robo advisor.

FAQs

Are REITs Taxable?

No. Canada offers special tax treatment for Canadian REIT stocks. When REITs pay most of their income through to their unitholders, over 80%, part of some distributions qualify as a tax-free return of capital.

Real estate investment trusts can maintain their tax exemption if they don’t hold other than qualified REIT properties. Additionally, at least 80% of the total fair stock market value of all trust properties that the REIT holds must be in Canada.

Certain tax benefits are available to encourage this investment. A REIT is not taxed on its revenue or gains from its rental property business in Canada. Instead, shareholders are taxed when the REIT’s property income is distributed, and some investors may be exempt from tax altogether.

Are REITs Safe?

As stated previously, the most effective REITs will still thrive during a recession. We still caution against over-investing in REITs. However, if you stick to high-quality trusts, they can be a great way to add low-risk value to your portfolio.

Are Private REITs Safe?

It depends, but we recommend you stay away. A private REIT is a real estate investment trust that isn’t listed on a stock exchange, unlike a traditional REIT. As a result, private REITs don’t have to disclose all information accessible with publicly traded assets.

As a result, the partnership of private real estate investment trusts usually emphasizes this advantage—since it avoids what it considers to be the volatility and speculation inherent in a broader market pullback.

However, private REITs lack the scrutiny from nosy intruders and analysts who will discover and draw attention to any hidden dangers and issues that the REIT faces. Overall, we believe investors should avoid private REITs. Instead, stick with publicly-traded REITs—and get all of the attention from investors and regulators.

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