Investors naturally search for stability amid the recent TSX pullback, uncertainty around tariffs, and recession fears. Pockets in the Canadian real estate sector could deliver unrivalled income stability and capital gains potential through real estate investment trust (REIT) structures. With some liquid cash to deploy during market turbulence in April, I’d buy Canadian REITs that have defensive portfolios of retail centers and hospitals. These defensive REITs to buy now offer a rare combo of deep discounts, steady future dividends, and recession-resistant tenants. With $15,000, here’s how I’d target two standout picks to weather the storm and thrive long term.
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Why selected Canadian REITs shine in a pullback
REITs let you invest in real estate without the hassle of owning physical property. They’re required to pay out most profits as dividends, making them income powerhouses. But here’s the kicker: many TSX-listed REITs now trade below their net asset value (NAV)—the estimated value of their properties minus debt. Imagine buying a $1 asset for $0.80. Pair that with essentials and everyday-needs-provider tenants like grocery stores and hospitals (people need them in any economy), and you’ve got a defensive play with upside.
Resilient Canadian REIT to buy: CT REIT
CT Real Estate Investment Trust (TSX:CRT.UN) is a top Canadian retail REIT to buy during the TSX pullback, thanks to its rock-solid tenant base. Its 376 properties are mostly anchored by Canadian Tire (TSX:CTC.A)—a 103-year-old retail legend selling everything from winter tires to garden supplies. Even in downturns, demand for essentials stays steady, and CT REIT’s strong 99.4% occupancy rate reflects that reliability.
Tenants here are locked into long-term leases averaging 7.7 years, and over 96% of rent comes from tenants with strong credit ratings, reducing default risk on rentals.
The REIT has raised dividends yearly since 2013, and its current 6.6% distribution yield is backed by a low payout rate on adjusted funds from operations (AFFO) of 73.4%, a metric showing dividends are comfortably covered by recurring distributable cash flow.
Better yet, CT REIT units trade at a 19% discount to their most recent net asset value (NAV) of $17.31, offering a significant margin of safety rarely seen in such a stable, high-quality Canadian retail REIT.
I would allocate $9,000 (60%) of the amount for steady income and downside protection.
Defensive REIT to hold: Northwest Healthcare Properties REIT
Northwest Healthcare Properties REIT (TSX:NWH.UN) stands out for investors wondering how to invest during a pullback with global diversification. This REIT owns 171 healthcare properties—hospitals, clinics, labs—across North America, Europe, Brazil, and Australasia. Healthcare demand is virtually recession-proof, especially with increasingly aging populations.
Tenants here sign ultra-long leases (13.6 years on average) because relocating an MRI machine isn’t simple. Occupancy sits at 96.4%, and despite past struggles (a 2023 cash flow crunch), the REIT has sold non-core assets, slashed debt, and stabilized its payout. The current 7.4% yield comes with a safer 93% AFFO payout ratio.
The clincher? Northwest Healthcare units trade at a jaw-dropping 56% discount to NAV. Investors can enroll in their DRIP (dividend-reinvestment plan) to automatically reinvest distributions and earn 3% bonus shares—turbocharging compounding over time.
I’d allocate $6,000 (40%) to Northwest Healthcare. It carries a higher investment risk, but the valuation and global footprint are too compelling. Given the high distribution yield, investors could double their capital in under a decade, according to the Rule of 72 estimates.
Why this strategy works
TSX pullbacks create rare windows to buy high-quality real estate at fire-sale prices. CT REIT’s necessity-based retail tenants and Northwest Healthcare Properties REIT’s global healthcare assets are defensive anchors. Together, they could generate about $1,038 annually in dividends. Reinvest those payouts via DRIPs, and compounding could turn today’s discounts into long-term wealth gains.
Critically, both REITs are trading below NAV—a signal the market is undervaluing their property portfolios. As sentiment improves, narrowing these discounts could drive share price (unit price) growth plus steady income.
Foolish bottom line: Turn market fear into opportunity
Pullbacks test investors’ nerves, but they also create chances to buy great assets cheaply. By anchoring $15,000 in CT REIT and Northwest Healthcare—two defensive REITs to buy now—you’re not just chasing yield. You’re investing in resilient sectors, deep discounts, and strategies built to outlast volatility.
Stay patient. Reinvest dividends. Let time and compounding turn today’s uncertainty into tomorrow’s gains.
