Saving and investing without breaking a sweat is possible through the Tax-Free Savings Account (TFSA). Regular contributions to the one-of-a-kind investment tool can also turn into a massive sum over time. Based on the most recent BMO Investment Survey, Canadians set a new record for the average amount in 2024.
TFSA values rose to an all-time high of $44,987 last year. Around 63% of poll respondents worry about a potential recession and have taken action to strengthen their financial positions. For accountholders who have yet to use their 2025 TFSA limits, an established real estate investment trust (REIT) is a good option.
Chartwell Retirement Residences (TSX: CSH.UN) pays a decent 3.5% dividend and the payout frequency is monthly. You can bet your entire TSFA on this monthly dividend stock owing to the favourable demographic trends and ever-increasing demand in the space. At $18.27 per share, the REIT enjoys a 22.7%-plus market-beating return compared to the TSX’s 2.6%-plus year-to-date gain.
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Unprecedented market dynamics
According to its CEO, Vlad Volodarski, the continued investments in the management platform along with portfolio optimization have positioned Chartwell to capitalize on the unprecedented market dynamics. Besides the accelerating demand in senior housing, new supply remains limited or constrained.
The $5.1 billion REIT is one of Canada’s largest operators in the senior living sector. It boasts a national presence in key markets. Chartwell focuses on the upscale and mid-market segments and fully owns most of the high-quality properties. Management expects the market imbalance to drive higher occupancy and rent growth.
Strong results to start 2025
In Q1 2025, total revenue increased 28.7% year-over-year to $252.9 million, while net income reached $33.2 million compared to the $2 million net loss in Q1 2024. The weighted average same property occupancy rose to 91.5% from 86.2% a year ago.
Chartwell’s primary source of liquidity is net operating income (NOI). During the same quarter, NOI rose 50% year-over-year to $93.5 million. Regarding debt, the REIT has access to low-cost mortgage financing insured by the Canada Mortgage and Housing Corporation (CMHC). Management intends to continue financing the properties through the national housing agency’s program.
“We are committed to building on this momentum by further growing occupancy and cash flows, said Volodarski. “We now project reaching 92.2% occupancy by June 2025, progressing toward our year-end target of 95%.”
Great tailwinds
Jonathan Boulakia, Chartwell’s chief investment officer, sees great tailwinds for the business. He told RENX, “Our occupancies at our existing properties have increased significantly over the last couple of years, and there’s a great sense of optimism for the industry generally and for our company specifically for the future, so we think this is a good opportunity to be acquiring newer assets.”
Boulakia also notes that the 75-year-old plus Canadian population segment is growing faster than the general population. He added that the supply and demand equation is helping Chartwell.
Pure private pay retirement company
Chartwell Retirement Residences is not only for income-focused TFSA users but generally for long-term investors. The current seniors housing demand is projected to double over the next 20 years. Moreover, the plan to continue its prodigious expansion program should boost the stock further. Lastly, CSH.UN has paid monthly dividends since March 2016.
