High-yield and monthly dividends are very desirable to income investors. Dividend companies know this, although many have adapted a quarterly payout schedule to align with quarterly financial reporting. A select few TSX-listed companies pay cash monthly, but Canadian real estate investment trusts (REITs) have instant appeal and dominate this niche by addressing the strong demand for frequent payouts.
The revenue model of REITs is anchored on monthly rent collections. This cash flow stream is a perfect match for investors seeking monthly distributions. Technically, you become a pseudo-landlord minus the operational and maintenance headaches of true rental property owners.
A sound investment option for income-oriented investors today is SmartCentres Real Estate Investment Trust (TSX: SRU.UN). This fully integrated REIT is present in Canada’s major cities. It is primarily a retail landlord, with retail properties forming the core cash engine.
Performance-wise, SRU.UN outpaces the broader market year-to-date, up 20.6% versus plus-10.2%. At $30.21 per share, the yield is a juicy 6.1%. A $14,712.27 investment, or 487 shares, transforms into $75 in monthly tax-free passive income inside a Tax-Free Savings Account (TFSA).
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Growing retail base
SmartCentres formed a joint venture partnership with Walmart in 1999. The retail giant is now the anchor tenant in 114 shopping centres across the country. Diversified JV partnerships followed, and today the retail base is growing alongside a mixed-use portfolio.
Strong revenue from the diversified tenant base, with 80% being necessity-based tenants, supports stable distributions to unitholders. Walmart Canada plans to invest $6.5 billion as it prepares for a nationwide expansion by 2030. SmartCentres will likewise capitalize on announced expansion plans of other leading tenants such as Dollarama, Loblaw, and Metro Inc.
Retail isn’t the only avenue for future growth. The pipeline for mixed-use development is around 87.4 million square feet, the largest in the REIT industry. Recurring income sources include apartments, offices, self-storage, industrial, and parking. Residential properties, comprising condos and townhouses, will provide development income. All the growth initiatives aim to achieve a recession-resistant portfolio.
Strong retail demand
The Q1 2026 results are reflected in the stock’s performance. In the three months ending March 31, 2026, net operating income (NOI) increased 0.9% year-over-year to $144.8 million. Net income reached $129.9 million from a $9.6 million net loss in Q1 2025. SmartCentres notes the strong retail demand during the quarter.
The REIT reported average rent growth of 5.8%, including anchor tenants. Notably, approximately 80% of maturing leases in 2026 were extended. SmartCentres remains focused on value-oriented retail, notwithstanding the ongoing enhancement of tenant quality. An ambitious growth program is underway for its core giant retailers. The construction of two high-development projects will begin later in 2026.
Leasing momentum was resilient in the first quarter, with around 56,000 square feet of vacant space leased. At the quarter-end, the average in-place and committed occupancy rate was 98.6%.
Stable distribution profile
The company, with Board approval, has the discretion to implement a dividend policy, including a payout schedule. SmartCentres has consistently paid monthly dividends since January 2003, indicating a highly stable distribution profile. However, analysts don’t expect meaningful dividend growth from this TFSA stock anytime soon.
