It’s hard to argue that investing in real estate is one of the best ways to put your money to work for you. So, naturally, finding the best Canadian REITs to buy will help your portfolio to perform well in 2022 and beyond.
Real estate is an excellent industry, because it’s generally quite defensive. In addition, if you find high-quality REITs with strong management teams, you can expect to see some significant and consistent growth for years to come.
So, if you’re looking to add some Canadian REITs to your portfolio for 2022, here are three of the best to buy today.
A high-quality residential REIT with tons of long-term growth potential
One of the best-performing growth stocks that you can buy in an industry that’s incredibly reliable is InterRent REIT (TSX:IIP.UN).
InterRent owns a portfolio of apartment buildings and other residential properties in Ontario and Quebec and has recently expanded into the Vancouver markets.
For years, it’s grown the value of its assets and the revenue its operations generate by expanding its portfolio and making savvy investments to renovate and upgrade its buildings. This has led to a total return for unitholders of roughly 600% over the last decade or a compounded annual growth rate of more than 21%.
Because of these incredible returns and InterRent’s consistent growth potential, the REIT generally trades with a significant premium. So, when the volatility in markets starts to pick up often, you can expect InterRent to lose some of that premium and become one of the best Canadian REITs you can buy.
A high-potential industrial REIT
In addition to finding high-quality funds that you can commit to for the long run, Granite REIT (TSX:GRT.UN) is a top real estate stock operating in an industrial real estate industry that has a significant runway for growth.
As e-commerce continues to become more popular, and retailers are seeing more of their sales coming from online shoppers, the need for warehouses to store goods is increasing.
In the past, companies could store most of their merchandise in their brick-and-mortar stores. But as merchants commit to more of their operations online, companies demanding warehouse space continue to pick up.
This is why Granite REIT has seen a ton of growth since the pandemic began and offers investors a lot more potential over the long run. The REIT has been growing rapidly by acquisition and is on pace to do almost $1 billion in acquisitions just this year.
So, if you’re looking for one of the best Canadian REITs you can buy and hold long term, Granite is a top choice.
One of the best Canadian REITs to buy undervalued today
Because real estate is such a great long-term growth sector, and because it’s generally quite reliable, most of the best Canadian REITs are fairly valued.
However, if you’re a value investor looking to buy a high-quality REIT while it’s trading at a discount, Boardwalk REIT (TSX:BEI.UN) is a stock that offers tons of value today.
Boardwalk is a residential REIT with more than 60% of its portfolio in Alberta. And because the Albertan economy has seen some struggles for years, Boardwalk stock has suffered as a result. Of course, the energy industry suffered through the pandemic, as oil prices tumbled and production was curtailed. But it was also suffering prior to that after oil prices fell back in 2015.
Lately, though, the Albertan economy has been recovering well, and Boardwalk itself has made some high-quality acquisitions, as it’s recycled capital. Plus, it’s beaten the street’s expectations for 11 consecutive quarters now, showing that it’s performing well, despite macroeconomic headwinds.
So, with the stock trading at a price-to-funds from operations ratio of less than 25 times, not only is it below the average of other residential REITs, but you could argue it’s the most undervalued of all its peers.
With the stock performing well, and the economy recovering significantly, it may not stay cheap for much longer. Therefore, if you’re looking for one of the best Canadian REITs to buy ahead of 2022, Boardwalk deserves some serious consideration.
