TSX Real Estate in March 2024: The Best Stocks to Buy Right Now

These three real estate sectors are due for immense growth in the coming decade, with these three clear winners.

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I know; you’re likely looking at the phrase real estate and perhaps feeling a bit sick to your stomach. I would certainly understand, given that most real estate sectors have fallen dramatically during the last few years.

And that certainly may continue for several sectors over the next while — especially as it looks like interest rates are going to remain high until at least June, if not longer. Yet, not every real estate sector belongs in this losing category. This is why today we’re going to look at three sectors analysts believe could be a strong buy right now. And, of course, we’ll consider stocks to go right along with them.

Industrial REITs

When it comes to a growing sector, industrial real estate investment trusts (REITs) have proven a solid choice. The growth in e-commerce and the overall growth of logistics continues to drive demand for warehouse and distribution space, especially near major cities.

Among industrial stocks, Granite REIT (TSX:GRT.UN) remains a solid option. Shares are down slightly over the last year, yet its high-quality industrial properties in Canada and the United States continue to see strong demand. In fact, analysts believe the stock will see earnings grow around 39% per year in the near future.

What’s more, the company and its dividend look quite solid for the foreseeable future. Net operating income (NOI) was up to $110 million for the fourth quarter, with same-property NOI rising by 4.7% as well. This all came even as the company saw net fair-value losses from investment properties. This just goes to show that even during dire times, the company can continue growing. And that makes its 4.51% dividend yield look particularly interesting.

Healthcare properties

Another sector that will only continue to climb in use is the healthcare sector. This is directly linked, of course, to the aging population not just in Canada but around the world. This will increase the need for senior housing as well as medical facilities.

One stock that had a major boost lately from this outlook is NorthWest Healthcare Properties REIT (TSX:NWH.UN). The stock has finally seen some positivity after strengthening its balance sheet. NorthWest stock managed to reduce debt, refinancing and extending maturities in the process. This helped with the immediate future costs from interest.

However, it also saw revenue grow by 4.1% in the fourth quarter and 12.3% compared to 2022 levels for the full year. Meanwhile, it saw NOI for its properties rise 4% as well while maintaining a 97% occupancy rate and 99% rent collection rate. So, this stock looks primed for future growth after achieving strong results once again. And that makes its 8.55% dividend yield look incredibly strong.

Data centres

Finally, there is still a lot more room to grow when it comes to data centres — not just in Canada, of course, but on a global scale. And that won’t be likely to slow down for the next decade. There continues to be high demand for data storage and cloud computing, fuelling growth for the sector.

That makes Hut Mining (TSX:HUT) look like a big winner when it comes to data centre results. The company is a cryptocurrency miner but also offers data centre services. While these centres focus on their own mining operations for now, that could certainly expand and create more stable revenue.

In fact, the company recently acquired even more data centres and is looking to rent them out to other companies. It’s now moving strongly into this space, providing less risk for those worried about the future of cryptocurrency. It could also mean the company eventually brings in a dividend yield. So, certainly keep your eye on this stock as well.

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 Amy Legate-Wolfe has positions in NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool recommends Granite Real Estate Investment Trust and NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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