28 Canadian REIT Stocks & ETFs with Expert Predictions (2019)

Had a good run in 2019, but now is breaking trend. He expects higher interest rates in 2021, which will pressure REITs. XRE will head lower in early-2020. He predicts a general market pullback in January.

(A Top Pick Feb 07/20, Down 22%) REITs outperformed into early March at which point he exited. There will be a time when REITs will come back.

XRE-T showed the experience of the REIT sector in a bad economy. Interest rates are going lower and lower. REITs are typically one of the last things to drop. When the baby gets thrown out with the bathwater, REITs go down also. The pullback last week is the first part of a short term trade…

Centres on the outlook for gold and gold producers. It's been an abandoned sector, but the fundamentals are pointing higher. US dollar has rolled over, starting to see inflation in the US, and it's held in well while markets have gone higher. There's been a move in the commodity in the last 6-8 weeks. Producers…

He likes real-estate as an asset class. He is more in private equity where volatility is lower and yield is better. He expects pretty significant destruction in retail and office REITs may have challenges with work from home. Broad REITs are probably not the best way to play this space. He prefers niche REITs.

He likes this retail REIT. It is trading at a 25-30% discount to NAV but Wal-Mart is the anchor tenant to 70% of their properties. 9% yield. The anchor tenant drives some of the traffic to the other stores. Post-vaccine, these will come back. (Analysts’ price target is $25.13)

80% of its assets are retail. He shies away from retail, but Loblaw owns half of those assets, which is stable and boasts high rent collection. The company is in good hands and the dividend is safe. Managers are doing a good job to diversify into apartments and industrial spaces to diversify away from retail.

This is the backbone and infrastructure of E-commerce and logistics. All the big box warehouses near airports are fully leased and they need more of it especially in major hubs. There are 100 properties in the US. They have good institutional support. They trade 10% less than some of their Canadian peers but 30% cheaper…

He would look for industrial warehouse or grocery anchored REITs that are doing quite well. He doesn't know NWH too well. People are paying their apartment rent too, so he hold some such as Boardwalk.

Dream Office vs. Dream Industrial Never a fan of Dream Office, which had a lot of Alberta exposure. He prefers the industrial side, which has performed better and faces little competition; there are only 3-4 industrial REITs in Canada. Hold both, don't buy or sell.

The retail space was in tough shape before the pandemic, it is only worse now. He would be leery of investing in a declining sector.

He has never really fully understood their business model. There has been a recent take out off for $7.61 US per share. This is a real offer and the money would be there. Prior to that they had worked with a third-party, so it is precluding them from engaging in the current offer. Looming in…

He's bullish on apartments long-term, given supply and demand in many markets. But short-term there's an impact. IIP has a growing presence in Montreal and he likes their overall portfolio, but assets around McGill and Concordia have taken a hit because foreign students can't enter Canada. A blue chip trading cheaply. If you're a longer-term…

He is not bull on the office space. They have been growing in sub-markets he is not keen on. 37% is in Atlantic Canada and he is not keen on their holdings.

(A Top Pick Oct 25/19, Down 37%) It has had a tough couple of years here. It is a really good buy right now, trading at a 30% discount to net asset value. They were able to collect more than 95% of their rents. One day the value will shine through.

This would be a hold for him, if not a sell. It has US grocery stores in small centres. It has an external management contract, which he feels is not in alignment with share holders.

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Really likes it. Agreed to be acquired by Blackstone. Wouldn't recommend it at this point. Doesn't see a higher bidder. Great opportunity to look at other Canadian REITs with global assets. Look at Granite REIT instead.

(A Top Pick Jun 25/20, Up 15%) They own industrial warehouses, the kind that Amazon and e-commerce uses and booming in this pandemic. It's doing well during the pandemic. Has a great balance sheet with low leverage and in a sector with stable, growing cash flows. They can make accretive acquisitions. Has a valuation gap…

He is a big fan of this company and likes their management team. Their own risk management tolerance is low. A lot of buildings in Toronto and Vancouver, but they also hold office space in tight markets. They find older buildings and turn into nice new spaces. The balance sheet is healthy.

Inovalis (INO.UN-T) or Dream Global (DRG.UN-T)? There is probably too much duplication to own both. These assets are a little more spread out, and concentrated in France. Instead of buying Canadian names that have exposure to Europe, he is actually going directly into Europe and buying some names.

A hold. A value name in apartments in Canada and the U.S. He's impressed with how stable their Toronto portfolio is, holding occupancy quite well. MGR is in the US sunbelt and Chicago. MRG is higher-leveraged. He's seeking REITs that are defensive. He doesn't see as much growth here vs. the REITs he already owns.…

A portfolio of US properties. It also has some interesting properties around the DVP area in Toronto. The CEO is one of the few people that not only knows how to buy, but also how to sell. Thinks that at some point, he will sell the entire company if he can, or bit by bit.

He would avoid this one. Office space is difficult to re-tenant. They have an external management structure for their assets, which does not necessarily leave great alignment.

Dividend safe? They did a convertible debenture that he participated in. This is an Edmonton based land bank company. A longer term play. What tends to happen is goes quietly along for a while then they sell off an asset, which causes a spike up. It does not have a large enough dividend to hold…

It is highly leveraged and the payout ratio is close to 100%, recently they cut the dividend and there was management turnover. There were a lot of complicated transactions, some of which were not arm’s length.

One of the only REITs that he still holds. He likes Australia. The problem with this one was when they first set it up, the Australian currency took a big hit right off the bat and that’s why it came down. They are now hedged. Great entry point at this level.

He is talking about US REITS generally and using the Vanguard REIT ETF to show the pattern across the industry. The EFT was trading in a consolidation range ($80-85’s) all of last year, then there was a sharp drop. The ETF has been retracing but the price (now $75.88) is not close to where it…

Generally likes mortgages. You get higher yields and there is harder collateral security. You are a step removed from the volatility of underlying real estate prices. 30% of it is in two securities, which concerns him somewhat.

Around 14% is pretty typical yield for mortgage REITs. This owns Agency Mortgage REITs, both fixed and adjustable rates. If you look through the results of the capital raise they did recently, it was dilutive, so their book value per share was about $7 which dropped to $6.70-$6.80. He doesn’t like to see this. Core…

US real estate ETF? Well diversified un-levered real estate investment.

It is highly leveraged and the payout ratio is close to 100%, recently they cut the dividend and there was management turnover. There were a lot of complicated transactions, some of which were not arm’s length.