In an attempt to build a worry-free passive income portfolio for retirement, the focal point isn’t supposed to be just the yield. I’d buy businesses with cash flows so predictable that I could comfortably turn off the monitor for the next five years, and still confidently expect compounding to continue as regular dividends and income distributions pour in non-stop.
In the Canadian real estate investment trust (REIT) asset class, selecting dividend stocks to hold for passive income without worry for five years is much easier. You just have to check out two key metrics first: portfolio occupancy rates and the weighted average remaining lease term (WALT).
High occupancy proves that tenants want the space; a WALT exceeding five years almost guarantees that contractual rent will keep rolling in every month, regardless of short-term economic hiccups.
As the second-quarter earnings season continues to unfold, two Canadian REITs standout: Granite Real Estate Investment Trust (TSX: GRT.UN) and Choice Properties Real Estate Investment Trust (TSX: CHP.UN). They check both boxes with flying colours – making them ideal buy-and-hold candidates for the next five years and beyond.
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Granite REIT
Granite REIT qualifies as a long-term buy-and-hold dividend stock that pays monthly distributions and maintains a fortress balance sheet. It’s one of the largest industrial property owners, with an expansive portfolio of 145 properties comprising 61.5 million square feet of gross leasable area (GLA) worth more than $9.5 billion.
The industrial REIT’s prime industrial, logistics, and warehouse properties located across Canada, the United States and Europe enjoy very high occupancy rates. Committed occupancy at 98.1% going into the third quarter of 2026 could make several REIT portfolio managers envious. With a weighted average remaining lease term of 5.1 years, Granite REIT’s portfolio should comfortably earn steady monthly rentals for the next half decade with ease.
Most noteworthy, new tenants are willing to pay higher rental rates. The trust averaged a 7% rental spread on new leases and renewals during the past quarter. Impressively, growing rental income resulted in a 9.7% year-over-year increase in portfolio net operating income last quarter.
Granite REIT has raised its distributions for 15 consecutive years now. With a low payout rate of adjusted funds from operations (AFFO) of 70%, the monthly distribution appears safe, well covered by recurring distributable cash flow, and leaves room for further annual raises.
I would be comfortable earning an entry-level 3.9% annual yield on this industrial REIT, with room for potential annual dividend raises over the next five years.
Choice Properties REIT
It boasts being Canada’s largest retail REIT with a growing portfolio of 699 properties, including industrial and mixed-use residential space, and Choice Properties REIT’s necessity-based retail portfolio is heavily anchored by its steady, strong, and reliable strategic partner, Loblaw Companies, giving the real estate behemoth strong rental earnings visibility beyond the next five years.
Loblaw, a major tenant comprising 57% of portfolio leasable space, has a master lease agreement with the REIT that extends to 2033, and allows for five-year lease renewals. The retailer recently renewed some leases averaging five years in maturity. Overall, the REIT’s weighted average lease term should be around 6 years.
Why should Choice Properties REIT belong in a long-term dividend portfolio for the next five years? Well, Choice Properties enjoys high occupancy rates averaging 97.7%, it recently reported double-digit rental spreads of 19% on renewals and releases, grew its funds from operations (FFO) over the past six months and paid out about 73% of FFO in distributions during the past quarter.
The REIT’s well-covered monthly distribution yields 5.1%.
