The Top Canadian REITs to Buy in November 2023

These two REITs are some of the first to consider as the market recovers, with stable income coming in throughout this volatile time.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. Amy’s work can be found regularly on the Financial Post and MoneyWise Canada. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog Finley, and travel. Follow Amy on LinkedIn.

Published November 27, 2023 8:00 pm EST

| More on: CAR.UNGRT.UN

Real estate investment trusts (REIT) continue to be incredibly difficult to manage these days. While there are some really high dividend yields out there, that doesn’t necessarily mean these are great buys. Today, we’re going to look at some of the more stable REITs in Canada. Even with the market starting to recover slightly, it’s still important to have stable stocks to get you through whatever comes next. And these REITs certainly offer stability in spades.

Granite REIT

Granite REIT (TSX:GRT.UN) is the first of these stable REITs that I would consider. That’s because it’s an industrial REIT, meaning it focuses on properties offering storage, warehouses, assembly lines and the like. Because of this, the company needs far fewer tenants and remains in high demand.

In fact, while other REITs are struggling to get back up to where they were last year, Granite stock continues to climb. It recently posted an increase in net operating income from $94 million to $109.2 million during the recent quarter.

Furthermore, funds from operations (FFO) climbed to $79.1 million, reporting net income of $33.1 million compared to a loss of $93.3 million the year before. Now, there were issues impacted by foreign exchange in FFO as well as a $53.2 million net fair value loss in investment properties. But as the market adjusts, these should rise once more.

The company also now targets a $3.30 annual distribution, increasing it by 3.125%. This should first come out in January, so now is the time to pick up the stock to bring in that higher dividend from this REIT!

CAPREIT

Another strong option among REITs right now is Canadian Apartment Properties REIT (TSX:CAR.UN). CAPREIT stock has been strong for decades but has been growing stronger for Canadians and those around the world seeking cheaper living options. As housing rates rise, apartment and rental demand has risen as well.

During its most recent quarterly report, CAPREIT stock continued to invest in strategic opportunities for the company. Total acquisitions for the first nine months of the year hit $208.3 million, while disposing of 388 suites. This brought in $60.8 million during the last three months and $354.5 million in the first nine months of 2023.

The REIT continues to attempt to diversify its property portfolio through strategic acquisitions such as these. And so far so good. Net operating income rose by 7.8% during the last quarter, with diluted FFO per unit up by 4.6%. Now, management expects to raise between $600 million and $650 million in mortgages for its Canadian portfolio alone in 2023.

So, while it also reported a fair value loss of $507 million in its properties in the last three months, this reflects market conditions. This is all set to rise once more as the market improves. For now, you can grab a 3.22% dividend yield while shares remain cheap and are due to rise once more.