For investors seeking meaningful passive income in retirement, there are a number of top investment choices within the market to choose from. Whether it’s dividend stocks with solid balance sheets and cash flows to support higher dividends over time, or other alternative assets in the real estate and other sectors, there are plenty of options available to income investors heading into a new year.
Real estate investment trusts (REITs) are investment vehicles that provide the best of both worlds. These trusts are set up in such a way that investors must be paid at least 90% of the net operating income of these companies, meaning the dividend yields that many top REITs provide can be materially higher than those offered by most dividend stocks. Additionally, these particular trusts often raise their distributions at a faster clip, making these top choices for those seeking income growth that can keep up with the rate of inflation.
With that in mind, here are three of the top REITs I think long-term investors should consider in 2026 for the medium to long term.
Dream Industrial REIT
I continue to think that industrial real estate could be the outperformer in terms of total return for the next few decades. In this sector, Dream Industrial REIT (TSX:DIR.UN) is among the best options for investors looking for exposure to the Canadian real estate market.
Dream Industrial owns a portfolio of high-quality assets close to city centres, providing much of the warehouse and distribution facility square footage needed to power the e-commerce revolution. For those bullish on same-day delivery services ramping up over time, this is an excellent option for the passive income streams generated from this business model.
With a dividend yield of 5.8% and plenty of room for increases in the years to come, this is a top REIT I think long-term investors would be remiss to ignore.
SmartCentres REIT
Retail-oriented real estate properties have been beaten down in this current market environment, and for good reason. Many investors want to own a slice of the future of retail (in the form of the warehouses and distribution centres supporting e-commerce activities, via industrial real estate – see above). However, retail real estate is one sector that has been beaten down, and SmartCentres REIT (TSX:SRU.UN) hasn’t been immune to these trends.
That said, SmartCentres is a unique play in this space. Leasing out the vast majority of its real estate to top-tier retailers around the world (with most of the company’s properties anchored by Walmart), this a retail REIT with plenty of cash flow stability. That’s not the norm, which is what makes this stock such an intriguing potential long-term hold.
Even after SmartCentres’ recent rally, this stock still provides investors with a juicy yield of 7.3%. That’s a yield worth grabbing while it’s still there, in my view.
Killam Apartment REIT
In the residential real estate sector, Killam Apartment REIT (TSX:KMP.UN) remains one of my top picks, particularly for Canadian investors.
Shares of the apartment REIT have been on the decline of late, due to investor concerns around prices coming down in some of the company’s key markets. Focused primarily on Atlantic Canada (an area I’d argue is underserved, but one with some of the more attractive rent profiles in the country), this REIT does appear to be well-positioned to weather whatever is ahead.
With a reasonable dividend yield of 4.6%, this is a REIT I think balances out an investor’s dividend portfolio well.
