A Tax-Free Savings Account (TFSA) does not need to be filled with only fast-moving growth stocks. It should ideally also hold investments that send cash back to you every month. That income could be reinvested, saved, or used to cover regular expenses.
Choice Properties Real Estate Investment Trust (TSX:CHP.UN) offers exactly that. As Canada’s largest real estate investment trust (REIT), it owns a diversified portfolio of grocery-anchored retail, industrial, and mixed-use properties across the country. The REIT currently pays monthly distributions and offers a 4.8% annualized dividend yield.
Let’s discuss why Choice Properties could be an ideal TFSA stock for investors seeking reliable monthly income.
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A monthly-paying dividend stock for a TFSA
To put it simply, Choice Properties owns nearly 700 income-producing properties with 68.5 million square feet of gross leasable area. Its assets include grocery-anchored retail centres, industrial properties, and mixed-use residential developments spread across Canada.
Choice Properties stock currently trades at around $16.17 per share, giving it a market cap of $5.3 billion. In addition to its monthly dividends, the stock has gained about 10% over the last year and roughly 21% over the past three years.
Strong operations supporting growth
Despite macroeconomic uncertainties and an elevated interest rate environment, the REIT continues to generate stable operating results. In the first quarter, its same-asset net operating income (NOI) on a cash basis increased 3% year over year (YoY), while funds from operations (FFO) rose 2.7% to $0.27 per share. Its portfolio occupancy also improved to 98.1% last quarter, reflecting healthy demand across its properties.
Meanwhile, Choice Properties continued investing in future growth during the quarter. It acquired two retail properties for $28.5 million, invested $21.9 million in its development pipeline, and completed projects that added nearly 22,000 square feet of new retail space.
Another key factor that makes this REIT attractive for long-term investors is the quality of its tenant base. Notably, around 83% of retail rental revenue comes from necessity-based retailers, while Loblaw remains its largest tenant. This gives Choice properties stable and predictable rental income, even during periods of economic uncertainty.
A major growth opportunity
In April 2026, the REIT announced an agreement with KingSett Capital to acquire certain assets of First Capital Real Estate Investment Trust in a transaction valued at about $9.4 billion, including assumed debt.
Under the agreement, Choice Properties is expected to acquire roughly $5 billion of First Capital’s high-quality retail assets, while KingSett Capital will acquire the remaining assets and all outstanding First Capital shares. The transaction is expected to close in the second half of 2026 after receiving all necessary approvals.
If completed, the acquisition would significantly expand Choice Properties’ portfolio of open-air, grocery-anchored shopping centres in some of Canada’s strongest urban markets. These assets would fit well with the REIT’s existing focus on necessity-based retail properties that generate stable rental income.
Foolish bottom line
Clearly, Choice Properties REIT continues to deliver stable operating performance, maintain high occupancy, invest in new developments, and pursue acquisitions that could accelerate its future growth. While the First Capital transaction still requires final approvals before closing, it has the potential to strengthen its already high-quality portfolio.
Given all these positive factors, Choice Properties looks like a solid TFSA stock worth considering, especially for investors seeking tax-free monthly income.
