The Canadian REITs we’ve found have grown their funds from operations (FFO) by at least 13% over the past three years
SmallCapPower | May 17, 2021: A real estate investment trust (REIT) is a company owning and typically operating real estate, which generates income. Properties in a REIT portfolio may include apartment complexes, data centers, health care facilities, hotels, infrastructure—in the form of fiber cables, cell towers, and energy pipelines—office buildings, retail centers, self-storage, timberland, and warehouses. To qualify as a REIT, a company must meet certain criteria with the CRA. Requirements include investing at least 75% of its assets in real estate, cash, or Canadian government bonds, receiving at least 75% of revenue from property rents, and payout 90% of taxable income to shareholders in the form of dividends. If the REIT meets these requirements, then it is exempt from corporate taxes. Today, we have sifted through and found four Canadian REITs with the best three-year growth in funds from operations (FFO). FFO is the metric used by real estate investment trusts (REITs) to define the cash flow from their operations.
*Share prices and other metrics as of May 14, 2021
Summit Industrial Income REIT (TSX:SMU.UN) – $16.12
REITs
Summit Industrial focuses on operating in the light industrial sector of the Canadian real estate industry. For reference, light industrial properties are typically one-story properties that are in, or close to, major cities. Examples of the type of tenants that lease its properties are warehousing and storage, light assembly and shipping, call centres and technical support, professional services and various other similar uses. The Company has 108 industrial properties with 13.6 million sq. ft of gross leasable area and an occupancy rate of 99.4%.
- Market Cap: $2,709.6M
- YTD-Return: +18.1%
- 1-Year Share Price Return: +70.8%
- 30-Day Average Trading Volume: 316,720
- FFO (LTM): $101.0M
- FFO (F2017): $80.5M
- FFO 3-Year Growth: 25.6%
NorthWest Healthcare Properties Real Estate Investment Trust
(TSX:NWH.UN) – $13.29
REITs
NorthWest Healthcare Properties operates a portfolio of healthcare real estate assets, comprised of interests in about 149 properties located throughout major markets in Canada, Brazil, Germany, Australia, and New Zealand. It owns and manages medical office buildings and healthcare facilities from coast to coast, including Calgary, Edmonton, Toronto, Montreal, Quebec City and Halifax. Its properties are a mix of professional office, laboratory, clinical, and pharmaceutical space, which makes most of its tenants essential service providers during COVID-19. NorthWest Healthcare recently acquired six private hospitals in the United Kingdom, which is expected boost revenue from $366 million in 2019 to $435 million in 2021. NWH.UN has a current dividend yield of about 8.6%
- Market Cap: $2,576.1M
- YTD-Return: +5.5%
- 1-Year Share Price Return: +46.7%
- 30-Day Average Trading Volume: 446,770
- FFO (LTM): $152.3M
- FFO (F2017): $129.1M
- FFO 3-Year Growth: 18.0%
Dream Industrial Real Estate Investment Trust (TSX:DIR.UN) – $14.28
REITs
Dream Global REIT owns and operates a diversified portfolio of office and industrial properties located in key markets in Western Europe, with a primary focus on Germany and the Netherlands. Currently, the Company has a gross asset value of $5.6 billion. As of September 30, 2020, Dream Industrial REIT owns and operates a portfolio of 266 industrial properties comprising approximately 26.6 million square feet of gross leasable area. Dream Industrial REIT’s objective is to continue to grow and upgrade the quality of its portfolio and to provide attractive overall returns to its unitholders. The Company’s assets are 94% industrial space and 6% office space.
- Market Cap: $2,691.1M
- YTD-Return: +8.6%
- 1-Year Share Price Return: +56.4%
- 30-Day Average Trading Volume: 585,380
- FFO (LTM): $126.6M
- FFO (F2017): $110.0M
- FFO 3-Year Growth: 15.1%
True North Commercial Real Estate Investment Trust (TSX:TNT.UN) – $7.34
REITs
True North Commercial Real Estate currently owns and operates a portfolio of 46 commercial proprieties, which total 3.73M sq. ft of space in urban and select strategic secondary markets across Canada. The Company’s properties are in British Columbia, Alberta, Ontario, New Brunswick, and Nova Scotia. The properties have a 97% occupancy rate. The Company generates 38% of its revenue from government tenants and 41% from credit-rated tenants.
- Market Cap: $641.4M
- YTD-Return: +16.3%
- 1-Year Share Price Return: +42.0%
- 30-Day Average Trading Volume: 153,020
- FFO (LTM): $53.5M
- FFO (F2017): $47.3M
- FFO 3-Year Growth: 13.1%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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