Canadian real estate investment trusts (REITs) are staging a remarkable comeback in early 2026, buoyed by stabilizing interest rates from the Bank of Canada and persistent e-commerce and logistics demand. Investors with a nose for value should load up now on select names trading at discounts to their intrinsic worth, delivering juicy dividend yields and growth prospects.
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Dream Industrial REIT
Dream Industrial REIT (TSX:DIR.UN) is your ticket to the industrial revolution underway right now. The company’s high-quality assets near urban centres are tailor-made for e-commerce distribution, with near-shoring trends adding tailwinds across North America and Europe.
This stock trades at a 20% discount to private market value and DCF fair value (at least according to my models). And with a dividend yield of 5.3%, there’s plenty to like about the long-term income component of this REIT. Indeed, I see solid capital appreciation and passive income returns over time, with my base case being double-digit total returns over the long-haul. At the end of the day, that’s what I’m after.
Short-term dips from JV partnerships are fading, paving the way for earnings acceleration as capital gets redeployed. With a reasonable price-earnings multiple and the stock trading below its fair value estimate in my eyes, this is a stock that has a place in a well-diversified portfolio.
With management guiding toward occupancy of more than 95% in its core properties, I think there’s plenty of long-term rental and net income growth ahead. Indeed, Dream Industrial remains one of my top long-term picks in the REIT space for these reasons and more.
Granite REIT
Another top real estate investment trust I’ve begun to get increasingly bullish on is Granite REIT (TSX:GRT.UN).
This pure-play logistics landlord just posted blockbuster 2025 results. Revenue surged to more than $618 million from $569 million in the prior year. Even more impressively, operating income surged to $519.8 million, proof of its mission-critical warehouses leased to investment-grade tenants on long-term, CPI-linked contracts. Additionally, same-property NOI growth clocked mid-single digits despite sector headwinds.
These tailwinds are supported by a pristine balance sheet boasting a debt-to-equity ratio of just 0.5 times and interest coverage of 3.7 times. That makes this stock an ultra-resilient option, even if rates tick up.
Trading at a rock-bottom price-book ratio of 0.7 times, this is an undervalued stock relative to its peers. And given the company’s 15-year dividend growth streak and 3.7% yield, I think the long-term income opportunity here is notable. Those thinking of adding a compounder with long-term total return upside shouldn’t sleep on Granite REIT right now, in my view.
