As is the case with stocks across many industries, there are plenty of high-quality Canadian REITs trading cheap today, offering investors one of the best opportunities to buy these stocks undervalued.
And while much of the market has sold off, REITs have been particularly affected, as interest rates have been rising rapidly. Therefore, some of the best bargains you can find on the market today will be in the real estate sector.
If you’re looking to take advantage of the current environment, you may want to do so soon. There’s no telling when the market could recover for good. We’ve already seen some signs the market could be bottoming.
It’s entirely possible that inflation could come back under control without hurting economic growth too severely. However, because it’s impossible to predict when the market will bottom, it’s crucial that when you find stocks trading at an attractive value and have confidence in their long-term potential, you pull the trigger and make an investment.
And if you’re looking to buy top Canadian stocks today, while these two REITs are trading undervalued, they are some of the best to buy.
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A top Canadian residential REIT
Residential REITs are always excellent investments to buy for the long term. Not only is residential real estate highly defensive, but it also offers tonnes of long-term growth potential. That’s why many of the best Canadian REITs to buy are residential REITs.
And of all the residential REITs you can buy in Canada, the largest and one of the most attractive to buy today is Canadian Apartment Properties REIT (TSX: CAR.UN).
CAPREIT owns apartment buildings, townhomes and manufactured housing communities all across Canada. In fact, in total, the company has nearly 70,000 sites and suites. This significant diversification helps makes CAPREIT an even safer investment than it already would be.
In addition, because its assets are spread out across Canada in several different cities and regions, it will likely face fewer headwinds if housing prices pull back significantly, especially compared to REITs, which are more focused in areas like Toronto and Vancouver, which have seen significant price gains in recent years.
Furthermore, on top of the confidence that you can have owning CAPREIT for the long term due to its reliability, the REIT is also trading undervalued now thanks to its recent selloff.
And when one of the top Canadian REITs is trading undervalued, it’s without a doubt one of the best stocks you can buy.
Right now, CAPREIT trades for just over 0.8 times its estimated net asset value. To put that in perspective, just under a year ago, CAPREIT was trading for 1.05 times its estimated net asset value.
So, while this high-quality REIT trades at an appealing discount, it’s certainly an investment you’ll want to strongly consider.
One of the best Canadian REITs to buy while it’s cheap
Another highly impressive Canadian REIT that’s been growing rapidly for years and continues to have tonnes of long-term growth potential is Granite REIT (TSX: GRT.UN). And because Granite REIT now trades nearly 15% off its high, and at a little over 0.9 times its estimated net asset value, it’s a discount you don’t want to miss.
It’s no secret that industrial REITs have been some of the best to own in recent years. As e-commerce continues to increase in popularity, the demand for warehouse space in many countries around the globe has increased considerably.
Therefore, as Granite has leases come up for renewal, it can increase its rents considerably, which is a major part of the stock’s growth in recent years. In addition, Granite also has several development properties that offer longer-term growth potential.
And while the stock is certainly trading at a discount today, we’ve already seen that it’s started to recover. Therefore, if you want to make sure you buy one of the very best Canadian REITs at a discount, I’d look to pull the trigger soon.
There’s no telling where it may go in the short run or how the stock market may perform, but one thing’s for sure: at this price, with Granite’s long-term growth potential, the industrial REIT is trading at a bargain.
