What would you do with an extra $300 every month in your budget? That could cover a bill or two, or even give some extra budget room. For investors looking to generate that income, RioCan (TSX: REI.UN) is an option that could help make that dream a reality.
Let’s take a look at what makes this a great option for investors to consider.
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Why consider RioCan?
RioCan is one of the largest REITs in Canada. The company owns and manages a portfolio of necessity-based retail properties located in major markets around Canada.
That portfolio includes over 160 properties with nearly 31 million square feet of leasable space. The necessity-based focus of those properties is part of the appeal.
Everyday shopping for essentials draws in recurring traffic, which helps retailers maintain a customer base.
For would-be investors, that represents a way to get exposure to an established rental business without owning any property. Tenants pay rent to operate their stores, and RioCan uses that income to cover debt, pay expenses and pay a monthly distribution.
The other advantage to consider is the monthly payment that RioCan offers. Monthly distributions make it easier to budget around monthly bills and household expenses.
Even for those investors not looking to use that income right away, a monthly distribution can be reinvested immediately for future growth.
RioCan has also expanded into mixed-use residential properties in recent years. However, the REIT is now selling those residential assets to focus on its core retail business.
During the first nine months of 2026, RioCan sold its interests in five RioCan Living properties for gross proceeds of $376.2 million. These sales form part of its strategy to free up capital for its retail-focused business.
What supports the payout?
To look at whether RioCan’s monthly payment is supported, let’s first look at the most recent quarterly results.
In the most recent quarterly report, the REIT reported retail committed occupancy of 98.9%, which was a record. That number includes space covered by signed leases, in addition to space already occupied. In other words, it signals strong tenant demand.
Commercial same-property net operating income also increased 4.2% when compared to the same period last year. That measures operating growth across comparable properties, which helps investors assess performance beyond changes from acquisitions and sales.
Finally, core funds from operations, or core FFO, increased 5.1% per unit to $0.41 in the most recent quarter.
Build toward $300 per month
RioCan pays out a monthly distribution of $0.0965 per unit. Over the course of an entire year, that works out to $1.158 per unit.
To generate $300 each month in distributions, that requires just over $66,000 invested at the current yield of 5.5%.
Fortunately, investors can start with a lower amount that can compound. Starting with just $5,000 will generate an income of just over $270. While that’s far off from the $300 per month target, it is enough to generate a new unit of RioCan each month from reinvestments alone.
Coupled with regular contributions, that initial investment can provide long-term growth.
That makes RioCan a great option for any well-diversified income portfolio.
