2 Top Canadian REITs for Building Reliable Income

Generate a reliable monthly passive income by investing in these two Canadian REITs and holding them in your self-directed investment portfolio.

| More on:
the word REIT is an acronym for real estate investment trust

Source: Getty Images

Key Points

  • REITs RioCan (REI.UN) and SmartCentres (SRU.UN) offer reliable monthly passive income—RioCan pays C$0.0965/month (~6.17% yield) and SmartCentres C$0.1542/month (~7.01% yield).
  • Both show stability and growth potential with very high occupancy (RioCan 97.5%, SmartCentres 98.6%), large development pipelines (43.8M and 58.9M sq ft) and predominantly essential, national tenants.
  • 5 stocks our experts like better than [SmartCentres] >

The last few years have made it clear that having just one revenue stream is simply not enough. Creating passive-income streams by investing your savings smartly (or Foolishly) is necessary to achieve long-term financial freedom. Investing in real estate seems attractive, but it comes with the drawback of requiring a massive cash outlay and the hassle of managing investment properties. Fortunately, there’s a way to become a landlord without the trivialities that come with it: Investing in real estate investment trusts (REITs).

Providing regular monthly distributions, REITs are companies that own and operate income-generating properties. In return for holding shares, REIT rewards them with monthly payments. Legally, they are required to distribute at least 90% of taxable income to shareholders. For investors seeking a passive-income stream, REITs can be a dream come true.

Against this backdrop, here are two top Canadian REITs to consider adding to your self-directed investment portfolio.

RioCan REIT

RioCan REIT (TSX:REI.UN) is a $5.54 billion market-cap REIT that owns, develops, and operates a portfolio of retail-focused and increasingly mixed-use properties. Its portfolio includes 178 properties, leased to retail clients. It also boasts a healthy 97.5% occupancy rate, meaning that it generates solid revenue from its portfolio.

RioCan has most of its properties in major Canadian markets. These are markets with high barriers to entry. Being well-capitalized allows RioCan to consistently grow its portfolio. The demand for high-quality retail-focused properties is growing. RioCan has a pipeline of 43.8 million square feet of properties in its development pipeline, ready to meet the demand as it grows. RioCan REIT pays its investors $0.0965 per share each month, translating to a 6.17% annualized dividend yield.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is a $4.71 billion market-cap, fully-integrated commercial and residential REIT. Its portfolio includes almost 200 properties, boasting a strong tenant base. SmartCentres shopping malls are a presence that many Canadians feel, with around 90% of the Canadian population living within 10km of one of its shopping centers. With around 60% of its tenants offering essential services and 95% of them having a regional or national presence, it has the kind of tenants that help it generate solid and reliable revenue.

SmartCentres REIT boasts a 98.6% occupancy rate. The rising demand for retail space also benefits SmartCentres. The REIT has 58.9 million square feet of developmental approvals pending, which can help it meet the growing demand. As of this writing, SmartCentres REIT trades for $26.39 per share, and it pays investors $0.1542 per share per month, translating to a 7.01% annualized dividend yield.

Foolish takeaway

Investing in REITs offers investors exposure to real estate in a convenient and accessible manner. With professionals managing the portfolio of properties, you can simply kick back and enjoy the monthly returns that will be proportional to how much you invest. There are plenty of REITs to pick from on the TSX, and these two could be excellent foundations for an income-focused portfolio.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Woman checking her computer and holding coffee cup
Dividend Stocks

2 Dividend Stocks Every Investor Should Own

These large-cap companies have the ability to maintain their dividend payouts during challenging market conditions.

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

Outlook for Manulife Stock in 2026

Manulife gives TSX investors diversified insurance and wealth exposure, but you must watch U.S.-dollar results and the economic cycle.

Read more »

Man meditating in lotus position outdoor on patio
Dividend Stocks

What to Know About Canadian Value Stocks for 2026

Three Canadian value stocks are buying opportunities in a steady rate environment in 2026.

Read more »

dividends can compound over time
Dividend Stocks

5.8% Dividend Yield: I’m Buying This TSX Stock and Holding for Decades

This TSX stock is offering a high and sustainable yield of 5.8%. Moreover, the company has been increasing its dividend…

Read more »

visualization of a digital brain
Dividend Stocks

2 No-Brainer Growth Stocks to Buy Right Now for Less Than $500

If you seek bullish growth stocks, here are two gems from the TSX to consider adding to your self-directed investment…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

The AI Stocks That Could Dominate the TSX in 2026

Canadian tech stocks that have adopted and successfully integrated AI in their respective businesses could dominate the TSX in 2026.

Read more »

Data center woman holding laptop
Dividend Stocks

Should You Buy This TSX Dividend Stock for its 5% Yield?

Brookfield Infrastructure Partners raised its dividend payout by 6% as it is well-poised to benefit from the AI megatrend.

Read more »

The Meta Platforms logo displayed on a smartphone
Dividend Stocks

Billionaires Are Selling Meta Stock and Buying This TSX Stock Instead

Billionaire trimming is a clue to re-check fundamentals and valuation, not an automatic sell signal.

Read more »