If you’re searching for a high-yield dividend stock that pays you like clockwork while trading at a jaw-dropping discount, check out Primaris Real Estate Investment Trust (TSX: PMZ.UN). With a juicy 5.8% monthly distribution yield and a history of raising payouts, this Canadian REIT isn’t just another passive income investment. It’s a rare trifecta of yield, growth, and deep value that I’m buying and holding onto for decades.
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Primaris REIT: A seemingly safe passive income stream meets uncommon value
Primaris is Canada’s only REIT laser-focused on enclosed shopping malls. While the pandemic crushed mall property valuations, Primaris is doing something brilliant: it’s aggressively scooping up top-tier properties at bargain prices, like the Hamilton’s Lime Ridge Mall ($416 million), before the sector fully recovers. Management’s long-term growth strategy could work wonders for loyal investors. The REIT’s recently acquired assets have already boosted portfolio quality, with same-store sales hitting $784 per square foot.
The trust’s second-quarter earnings report screamed strength. Funds From Operations (FFO, a key measure of REIT cash flow) jumped 5.5% year-over-year. Same-property cash profits grew 5.5%, driven by higher rents and cost recoveries. Leasing momentum appears robust. Tenants renewed leases at 6.7% higher rents on average. And management has just raised full-year FFO guidance to $1.74–$1.79 per unit (from $1.70-$1.75).
Why the REIT’s monthly distribution is attractive
Primaris REIT’s 5.8% yield is built to last. Trustees target a 45–50% FFO payout ratio, and its payout rate of Adjusted FFO (AFFO) at 67.5% during the past quarter was a significant improvement from 78.8% a year ago. The trust’s AFFO payout rate is one of the most conservative in the Canadian REIT space today. Better yet, management commits to hiking that payout annually by 2–4% through 2027. It has delivered before: 2.5% in 2022, 2.4% in 2023, and 2.4% in 2024.
Your monthly income doesn’t just sit still; it steadily climbs higher every year.
A “30% Off” NAV discount no one’s noticing
Here’s where Primaris REIT becomes irresistible. Units trade near $14.86 today. But their Net Asset Value (NAV) — the real worth of the REIT’s properties — is $21.43 per unit as at June 30, 2025. Units trade at a 30.7% discount!
Why do PMZ units trade at a deep discount? Perhaps it’s lingering PTSD from pandemic-era mall crashes. But COVID-19 was a rare global disaster unlikely to repeat in our lifetimes. Primaris REIT isn’t waiting for the enclosed mall values to recover — it’s buying back its own units at a 30%-plus discount, signaling rock-solid confidence in the trust units’ undervaluation.
Financially, Primaris is armoured for the long haul. With $584 million in liquidity and no major debt due until 2027, it’s built to weather storms. Its $4.4 billion in unencumbered assets (debt-free properties) offers flexibility.
Why I’d hold for 20+ years?
An investment in Primaris REIT isn’t a quick flip; it is a stake in a compounding machine. As mall values recover, that 30% NAV discount should narrow, potentially fueling capital gains alongside your monthly income. Further, portfolio leases have built-in rent escalators and percentage rents tied to tenant sales, acting as an inflation shield. And if you reinvest those monthly payouts? Compounding could turn today’s yield into a cash-generating titan over time.
The Foolish bottom line
TSX dividend hunters looking to snag a high-yield dividend stock in August may find Primaris REIT a gem. It’s a high-yield monthly dividend payer with growing distributions, backed by real assets trading at fire-sale prices. Management’s aggressive acquisitions, operational discipline, and shareholder-friendly buybacks create a perfect storm of passive income and long-term upside. I’d buy units in August and plan to collect those rising cheques well into retirement. At a 30% NAV discount, you’re not just earning a 5.8% yield; you’re getting paid to wait for the market to wake up.
