A high-yield dividend stock can still look safe, even with a yield as high as 7.5%. Sure, we’re usually warned against these, but when the payout lines up with cash flow, debt looks manageable, and management takes hard steps before trouble gets worse, that dividend stock can look appealing.
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That’s why today we’re looking at Allied Properties REIT (TSX: AP.UN). The dividend stock still carries a yield around 7.5%, pays monthly, and now distributes $0.72 per unit annually after a major reset. The dividend stock owns urban workspace properties in Canada’s major cities, with a focus on distinctive office and mixed-use assets. So now, it sits closer to the office recovery trade, which makes it riskier but also potentially more interesting if leasing improves.
And a recovery certainly needs to happen. The dividend stock recently traded near $9.65 at writing, and that’s compared with a 52-week high above $22. Therefore shares sliced more than in half, leading to the potential for even a modest recovery.
Recent news over the last year shows Allied is trying to fix the business rather than pretend office weakness will disappear. In December 2025, Allied cut its monthly distribution by 60% to $0.06 per unit, or $0.72 annualized, to reduce debt and interest costs. In February 2026, it also announced a $500 million equity financing, with proceeds aimed at repaying the $600 million Series H debentures, while non-core asset sales help cover the rest.
Into earnings
After the cuts, there’s earnings. In Q1 2026, Allied had a roughly $500 million disposition pipeline. It completed $46 million in sales during the quarter and had about $454 million still targeted for sale by year-end 2026.
Allied reported rental revenue of $143.9 million, down 4.5% from $150.6 million a year earlier. Operating income fell 14.3% to $69.6 million. Same-asset NOI from the rental portfolio fell 10.4%, which shows the office pressure hasn’t disappeared. However, the portfolio still had 85% occupied area and 87.1% leased area.
Meanwhile, now with the dividend cut, the reset looks more defensible. In Q1 2026, Allied reported funds from operations (FFO) per unit of $0.289, excluding certain items, down 43.6% year over year. AFFO per unit came in at $0.218, down 53.3%. With these falls came a better valuation however, with the dividend stock trading at 0.44 times book value.
Looking ahead
I get it, Allied stock certainly isn’t perfect, but that’s not the goal here. What we want is a recovery, so let’s see if the dividend stock can cover it. Allied has $707.8 million in liquidity, or $807.8 million including its accordion feature. It also has $7.2 billion in unencumbered investment properties, equal to 89.9% of investment properties.
Management also said its new leasing pipeline increased 36% in Q1 2026, which gives the dividend stock a timely catalyst if leases start turning into occupied space. So now, the dividend stock offers a rare mix: a high monthly yield, a beaten-down valuation, and a self-help plan already underway. And today, even $7,000 can make a big difference.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| AP.UN | $9.60 | 729 | $0.72 | $524.88 | Monthly | $6,998.40 |
Bottom line
Allied Properties REIT may not be too good to ignore for every investor, but it looks too interesting to dismiss outright. The old dividend was too heavy, so management cut it. Debt was an issue, so Allied raised equity and pushed asset sales. Leasing was weak, so the company focused its action plan on occupancy, dispositions, and deleveraging.
The result isn’t perfect, but more stable. A 7.5% monthly yield, an 88.3% adjusted AFFO payout ratio, $707.8 million in liquidity, and a dividend stock still trading far below its 52-week high create a clear setup. For investors comfortable buying a turnaround before the crowd returns, Allied could be one of the more compelling high-yield REITs on the TSX right now.
