Real Estate Investment Trusts (REITs) are companies that own, manage, or fund income-producing real estate. These companies must pay out at least 90% of their taxable income to shareholders as dividends, making them ideal for income-seeking investors. Against this backdrop, let’s look at the following two REITs offering excellent buying opportunities.
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SmartCentres Real Estate Investment Trust
SmartCentres Real Estate Investment Trust (TSX: SRU.UN) is a fully integrated REIT that owns and operates 196 strategically located properties across Canada. Its portfolio includes retail shopping centres, mixed-use properties, and development lands, with around 90% of Canadians living within 10 kilometres of its shopping centres. Given its grocery-anchored shopping centres, diversified and mixed-use properties, and solid tenant base, the company enjoys a healthy occupancy rate, which stood at 98.4% in the first quarter of 2025. Meanwhile, around 95% of the company’s tenants have a national or regional presence, while above 60% of its tenants offer essential services.
Further, the REIT witnessed a 4.1% increase in its same property net operating income due to the growing demand for existing space and strong retention. It also has municipal permissions to develop 59.1 million square feet of mixed-use properties, with 1 million square feet of properties under construction. Additionally, the lease-up and renewal activities should support its financial growth in the coming quarters, thereby allowing it to continue rewarding its shareholders with healthy dividends. Currently, the company offers a monthly dividend payout of $0.1542/share, translating into a forward dividend yield of 7.2%. Besides, the company’s valuation also looks attractive, with its NTM (next 12 months) price-to-earnings multiple at 19.7.
RioCan Real Estate Investment Trust
My second pick would be RioCan Real Estate Investment Trust (TSX: REI.UN), which owns 177 properties across the country, with a total net leasable area of around 32 million square feet. The company leased one million square feet of properties during its first quarter of fiscal 2025, including 0.2 million square feet of new leases. These new leases improved its occupancy rate from 97.1% in the previous year’s quarter to 98%. Further, its blended leasing spread improved 300 basis points to 17.5%. Bolstered by the solid operating performance, RioCan’s diluted fund flows per unit grew by 8.9% to $0.49.
Moreover, the Toronto-based REIT has a developmental pipeline of 48.3 million square feet of properties, with 0.9 million square feet of properties currently underway. It has also submitted applications to develop around 3 million square feet of properties. With liquidity of $1.4 billion at the end of the first quarter, the company is well-equipped to fund its growth initiatives.
Additionally, the company is monetizing its RioCan Living residential rental portfolio to strengthen its financial position. In May, it signed an agreement to sell a 50% interest in four properties of its RioCan Living residential rental portfolio, which can generate $197.3 million. Excluding these properties, the company’s RioCan Living residential rental portfolio consists of nine income-producing properties and two properties that are in the developmental stage, valued at $0.9 billion. The management expects to complete the sales of these properties over the next 12 to 24 months. Considering all these factors, I believe RioCan can continue paying dividends at a healthier rate.
Meanwhile, RioCan currently pays a monthly dividend of $0.0965/share, generating a forward dividend yield of 6.5%. Also, it currently trades at a NTM price-to-earnings multiple of 14.7, making it an excellent buy.
