Most investors dream of passive income – the kind that lands in your account while you’re sipping your morning coffee. That’s where real estate investment trusts (REITs) come in. But not just any REIT will do. For Canadians who want monthly cash flow with a strong yield, SmartCentres REIT (TSX: SRU.UN) is hard to ignore. It currently pays a 7.2% annual dividend and sends out payments every single month, no waiting, no guesswork.
Source: Getty Images
About SRU
SmartCentres built a reputation as one of Canada’s most stable REITs. It owns a portfolio of 196 properties, mainly retail centres anchored by Walmart. That alone gives it a major edge. Walmart tends to attract steady foot traffic and is seen as recession-resistant. So when times get tough, people still shop there, and tenants around it benefit. As a result, SmartCentres has a sky-high occupancy rate of 98.4%, even in today’s shaky market.
This consistency shows up in the trust’s numbers. In the first quarter of 2025, SmartCentres reported net rental income of $136.8 million, up 4.6% from the year before. It also posted funds from operations (FFO) of $0.56 per unit, compared to $0.48 in the same quarter of 2024. FFO is one of the key metrics for REITs. It’s a cleaner way to look at how much cash is coming in. And when that number rises, it means the business is on solid ground.
The dividend right now sits at $1.85 per unit annually, or roughly $0.1542 each month. That comes out to a yield of around 7.2% based on recent share prices. For long-term investors, that’s an attractive source of income, and it’s distributed monthly, which makes budgeting a whole lot easier. It’s rare to find a company that pays you monthly, yields over 7%, and manages to keep the cheques coming during economic turbulence.
Considerations
Of course, no investment is perfect. SmartCentres did report a net loss of $9.6 million in Q1 2025. That was actually an improvement over the $21.2 million loss a year ago. These losses mostly came from non-cash items like fair value adjustments to its properties and higher administrative costs. These are important to watch, but they don’t affect cash available for distributions. The core business of collecting rent and managing properties is doing just fine.
SmartCentres is also thinking ahead. It isn’t just a retail landlord. It has been expanding into residential and mixed-use developments. One of its biggest projects is the Vaughan Metropolitan Centre, where it’s building new condos, offices, and apartments. The first condo tower, ArtWalk Tower A, is already 93% pre-sold.
That said, one number to keep an eye on is the payout ratio. SmartCentres currently pays out about 108.7% of its adjusted funds from operations. Ideally, you want that number to be under 100%. A high payout ratio means there’s less room to reinvest in the business or weather downturns. Still, the company’s strong cash flow and stable tenant base suggest the dividend is likely safe for now.
Bottom line
If you’re looking for a REIT that pays you monthly, offers a high yield, and holds a steady portfolio of recession-resistant properties, SmartCentres is worth a look. You won’t see rapid growth here, but you will see consistency. And in a TFSA, that monthly cash can add up quickly, especially when it’s tax-free or tax-deferred. And as you can see, that can add up to about $716 in annual income from a $10,000 investment!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| SRU.UN | $25.78 | 387 | $1.85 | $715.95 | Monthly | $9,976.86 |
For income-focused investors, few opportunities on the TSX deliver this kind of mix: strong yield, monthly payouts, and a real estate base that has stood the test of time. SmartCentres might not be flashy, but it gets the job done. And for many Canadians, that’s exactly what they’re looking for – a little peace of mind, with some cash left over at the end of the month.
