With interest rates staying higher for longer and inflation weighing on budgets, Canadians are craving consistent cash flow. For those looking to earn passive income while avoiding risky bets, Artis Real Estate Investment Trust (TSX:AX.UN) might be worth a look. It pays a steady monthly dividend and currently yields about 7.86%, all while trading at a discount to its net asset value. Let’s explore why this REIT is worth watching, even if it’s not perfect.
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About Artis
Artis REIT is a diversified REIT with a mix of industrial, office, and retail properties across Canada and the United States. Its strategy has shifted in recent years, focusing more heavily on industrial real estate while reducing exposure to underperforming office properties. That pivot was designed to improve cash flow stability and reduce risk in the portfolio. And while some investors remain cautious, Artis is showing signs that it’s heading in a more focused, income-driven direction.
The big appeal here is the dividend. As of writing, Artis REIT pays $0.60 annually, split into monthly payments. That works out to a dividend yield of around 7.86% based on a share price of $7.70. For investors looking for monthly income, that’s a solid payout. It won’t make you rich overnight, but it offers a reliable stream of cash every 30 days, something many Canadians are now prioritizing in their portfolios.
Into earnings
The most recent quarterly earnings help paint the picture. For the first quarter of 2025, Artis reported rental revenue of $101.3 million, up slightly from $100.1 million a year earlier. Net property income came in at $63.4 million, and adjusted funds from operations (AFFO) per unit were $0.18, slightly down from $0.20 last year. While that’s a modest decline, it still more than covers the monthly distribution. The trust’s payout ratio sits around 42% of AFFO, which is relatively conservative for a REIT and suggests the dividend remains sustainable for now.
However, it’s not all sunshine. Artis continues to face challenges in its office segment, which makes up just under 30% of its portfolio. While occupancy in its industrial properties remains strong, office properties are still seeing weaker demand, especially in urban cores. This weighs on the overall stability of rental income and continues to pressure valuation. The trust reported an overall occupancy rate of 89.3% for the quarter, with industrial assets doing the heavy lifting.
Considerations
Debt is another area to watch. As of the latest report, Artis had total debt of $1.88 billion and a debt-to-gross book value ratio of 55.9%. That’s high for a REIT, and interest expense is climbing. For investors focused on risk, that leverage level might be a red flag. Still, Artis is taking steps to manage debt, including selective asset sales and refinancing efforts to improve balance sheet strength.
The trust also trades well below its International Financial Reporting Standards (IFRS) net asset value, which was $12.34 per unit as of March 31. With shares currently around $7.70, that’s a steep discount. While some of that gap reflects investor concerns over the office portfolio, it also suggests potential upside if management continues to execute on its strategic pivot.
Bottom line
So, is Artis REIT a slam dunk? Not quite. But it is a 6.5% dividend stock paying cash every 30 days, with a manageable payout ratio and a plan to stabilize its asset base. It might not be the flashiest REIT on the TSX, but it delivers what many income-focused investors are after: reliable, monthly cash. Right now, this investment could come in at $778.80 annually, or about $65 a month, from a $10,000 investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| AX.UN | $7.70 | 1,298 | $0.60 | $778.80 | Monthly | $9,988.60 |
If you’re building a portfolio to withstand market noise and deliver steady income, Artis deserves consideration. Just make sure to keep an eye on office sector trends, interest rates, and management’s ability to execute its strategic shift. It’s not a perfect stock, but for long-term investors seeking passive monthly income, it could play a valuable supporting role.
