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Invest in the Hottest Real Estate With These 2 REITs


After one of the biggest booms in housing prices, it seems that rising interest rates and affordability issues are having the expected negative impact on this real estate asset class.

Yet we can and should still participate in a segment of the real estate market that is seeing very strong drivers at this time — that is, real estate that caters to the medical needs of society.

As we know, society is facing a rapidly aging population, and as the baby boomers are now between the ages of 54 and 72 years old, we continue to see big demand in products and services for this stage of life.

According to census numbers, the percentage of Canadians that are above the age of 65 is fast approaching 20%. This number has been steadily rising and just five years ago was closer to 15%.

Here are the two real estate investments/dividend stocks that investors may want to consider:

Chartwell Retirement Residences (TSX:CSH.UN)

Chartwell, the largest provider and owner of seniors-housing communities, from independent living to long-term care, has been benefiting from rising occupancy levels, as an uptick in demand has been accompanied by a stagnant supply of seniors housing.

With a 3.9% dividend yield, four consecutive years of cash distribution increases, and a quality portfolio of properties, Chartwell stock is a solid investment that is well positioned for the future.

Going forward, the company has a strong pipeline of opportunities to expand its portfolio of seniors-housing developments as well as a plethora of opportunities to continue to expand its support services that are offered in house.

For example, Chartwell has been working hard at expanding its sources of revenue by introducing additional care and ancillary services, such as dental, foot care and physio services.

It’s a real estate investment for the long term.

Northwest Healthcare Properties REIT (TSX:NWH.UN)

With a current dividend yield of 7.11%, Northwest is a solid dividend stock for real estate investors. Like Chartwell, Northwest is benefiting from the aging population.

It offers a high-quality global and diversified portfolio of healthcare real estate properties located throughout Canada, Brazil, Germany, Australia, and New Zealand.

Healthcare properties generally have stable occupancies and long-term leases, which make the underlying REIT a defensive one that is attractive for long-term investors.

This real estate giant has a growing market that addresses the aging population not only in Canada, but in selected countries worldwide, and as such, it is another real estate investment for the long term.

Bottom line

So, real estate investors may want to consider both these real estate stocks for their dividends, stability, and exposure to the biggest demographic shift that much of the developed world is facing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Karen Thomas owns shares of NORTHWEST HEALTHCARE PPTYS REIT UNITS. Northwest Healthcare Properties is a recommendation of Stock Advisor Canada.

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