When it comes to building long-term wealth with monthly cash flow, real estate investment trusts (REITs) can be a top choice. Especially in times of high interest rates and sticky inflation, having a reliable source of passive income becomes more than just a nice-to-have; it becomes a financial anchor. Dream Industrial REIT (TSX:DIR.UN) is one of those rare finds that combines consistent income with upside potential. It currently offers a yield of about 6%, paid out every 30 days. But there’s more going on beneath the surface.
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What a Dream
Dream Industrial REIT owns and operates industrial properties across Canada, the U.S., and Europe. That includes logistics centres, warehouses, and light industrial facilities. This type of real estate has seen rising demand thanks to the ongoing e-commerce boom and supply chain re-shoring. As of its most recent earnings, the trust had 336 properties totalling 72.6 million square feet of gross leasable area.
In the first quarter of 2025, Dream Industrial reported net rental income of $91.7 million, up 6.8% from the first quarter (Q1) of 2024. Funds from operations (FFO), a key metric for REITs, came in at $0.26 per unit. That was up from $0.24 per unit a year ago. This shows real progress in both top-line rental revenue and bottom-line distributable income.
Perhaps most importantly for income investors, the payout ratio remains in solid territory. Dream paid out $0.0583 per unit monthly, or about $0.70 annually. That works out to roughly 87% of FFO, which is sustainable for a REIT of its size and stability. You’re getting a meaningful monthly cheque without stretching the business too thin. In fact, $10,000 could bring in $608 in annual income, or $50.69 every month!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| DIR.UN | $11.50 | 869 | $0.70 | $608.30 | Monthly | $9,993.50 |
More to come
The trust also continues to expand. In Q1, it acquired three properties, signing on 1.5 million square feet in new leases and renewals, primarily in strong-performing European markets. Europe now makes up about 16.4% of the portfolio, giving the trust good geographic diversification while taking advantage of higher rental spreads in places like Germany and the Netherlands.
Now, it’s not all sunshine. Interest rates remain a headwind. The cost of capital is high, which makes refinancing and acquisitions more expensive. However, Dream Industrial is handling this challenge well. Its weighted average interest rate is still just 2.78%, and it has staggered debt maturities with no major refinancing cliffs on the horizon. Debt to total assets was 36.9% at the end of the quarter, on the higher end, but still manageable.
What sets this REIT apart is its development pipeline and scale. Many smaller trusts simply collect rent. Dream is actively developing space and negotiating new leases, which creates embedded growth. These projects come with expected yields of 7% to an incredible 18%, meaning future rental income should continue to grow.
Bottom line
So, is now the time to buy? With the yield sitting near 6% and the dividend stock trading at a modest price-to-FFO multiple, Dream Industrial looks undervalued. It also trades below its net asset value per unit, offering a margin of safety. If interest rates ease later this year or in 2026, there could be a tailwind for both the stock price and valuation multiples.
In a world where many stocks offer quarterly dividends, this monthly payer stands out. For TFSA investors, especially, that kind of regular income without the tax hit is hard to beat. If you’re looking to protect your portfolio with hard assets and still want income that rolls in every month, this 6% dividend stock is worth holding for the long haul.
