It’s no secret that one of the best industries passive income seekers can invest in is real estate. There are plenty of high-quality Canadian real estate investment trusts (REITs) that generate consistent and growing cash flow year in and year out.
Real estate is one of the oldest and most defensive industries you can invest in. Owning property directly, however, can come with a lot of headaches, such as maintenance costs, property management, and the risk of vacancies.
That’s why REITs are some of the best stocks passive income seekers can buy. They let you benefit from property ownership without the headaches or work.
And while most investors tend to gravitate toward residential REITs, which makes sense because rental housing is one of the most defensive industries in the market, other subsectors of real estate offer just as much stability. In some cases, they even offer better long-term income potential.
So, if you’re a dividend investor looking to meaningfully increase the passive income your portfolio generates, here are two of the best Canadian REITs to buy now.
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One of the best Canadian REITs to buy for passive income
There’s no question that one of the best REITs passive income investors can buy is CT REIT (TSX: CRT.UN).
CT REIT is incredibly reliable, currently offers a dividend yield of 5.8%, and has increased that dividend every year since going public just over a decade ago. That mix of reliability, a significant dividend yield and consistent dividend growth is extremely rare for a dividend stock, especially a retail REIT.
The reason it’s so reliable is its relationship with one of the best-known retailers in Canada, Canadian Tire. Canadian Tire is both CT REIT’s largest tenant, accounting for approximately 90% of its revenue. However, it’s also the REIT’s largest shareholder.
Therefore, because Canadian Tire is such a high-quality company itself, and because both businesses’ interests are aligned, CT REIT is extremely reliable.
While many of its retail REIT peers were impacted by the lockdowns during the pandemic, CT REIT continued to increase its revenue, funds from operations, and dividend.
Plus, going forward, not only will it continue to see growth from rent escalations, but CT REIT also has a tonne of development projects in the works. For example, it had over 1.1 million square feet of ongoing development activity as of June 30th and has already announced more than 250,000 square feet of new developments in 2025.
So, if you’re looking for Canadian REITs that offer a significant yield today and consistent dividend growth over the long haul, CT REIT is easily one of the best investments that passive income seekers can consider.
A top industrial REIT
In addition to CT REIT, another high-quality Canadian real estate stock offering both an attractive dividend yield and long-term dividend growth is Granite REIT (TSX: GRT.UN).
While CT REIT has plenty of potential due to its relationship with Canadian Tire, Granite REIT is one of the best REITs to buy now due to its industry.
As online shopping grows in popularity and companies continue to invest in improving their logistics to lower costs, the demand for industrial real estate and warehouse space continues to increase.
Therefore, not only does Granite have loads of potential as new developments come online, but even as leases turn over, the REIT is seeing significant growth in its revenue.
And while Granite doesn’t offer as high a yield as CT REIT, currently at just 4.2%, its payout ratio is even more conservative. That means Granite’s dividend is even safer than CT REIT’s, plus it has more capital to invest in future growth.
So, if you’re looking to boost your passive income and buy high-quality Canadian REITs that you can have confidence owning for the long haul, there’s no question Granite is one of the best in Canada.
