The Canadian REITs on our list are generating industry-high Funds From Operations (FFO) yields
SmallCapPower | December 12, 2017: REITs offer a stable investment opportunity for income-seeking-investors along with high dividend yields. Today, we have identified four Canadian REITs that return the highest Funds from Operations as a portion of their current market price (FFO Yield). The trusts listed offer attractive FFO yields, significantly higher than the industry average 9%. Funds from Operations is a common industry metric, used to define a REIT’s cash flow from operations. The metric is calculated by adding depreciation and amortization to earnings and subtracting any gains on sales.
American Hotel Income Properties REIT LP (TSX:HOT.UN) – $9.07
Specialized REITs
American Hotel Income Properties REIT (AHIP) is a Canada-based trust that focuses on hotel assets, primarily across the United States. AHIP’s portfolio comprises a total of 11,570 hotel rooms across 113 properties including 41 restaurants.
- Market Cap: $708 Million
- Month over Month Return: -2.4%
- FFO Per Share (TTM): $ 1.12
- FFO Yield: 12.37%
Melcor Real Estate Investment Trust (TSX:MR.UN) – $8.49
Commercial REITs
Melcor REIT focuses on the acquisition and operation of commercial properties in Western Canada. The Company’s portfolio currently comprises 37 assets covering ~2.7 million square feet with an aggregate property value of $667 million. In addition, Melcor REIT is backed by Melcor Developments Ltd (real estate developer), providing the trust with a strong acquisition pipeline for up to 7 million square feet in additional rental space.
- Market Cap: $95 Million
- Month over Month Return: -2.1%
- FFO Per Share (TTM): $ 1.04
- FFO Yield: 12.24%
Morguard Real Estate Investment Trust (TSX:MRT.UN) – $13.80
Commercial REITs
Morguard REIT is a Canada-based trust that operates a variety of commercial and industrial properties across six provinces in Canada. The Company’s real estate portfolio includes 49 commercial properties totaling ~8.8 million square feet. The properties mainly comprise office buildings and shopping malls across the country with an aggregate value of $2.9 billion.
- Market Cap: $837 Million
- Month over Month Return: -0.9%
- FFO Per Share (TTM): $ 1.66
- FFO Yield: 12%
Slate Retail REIT (TSX:SRT.UN) – $13.06
Commercial REITs
Slate Retail REIT is a Canada-based trust that focuses renting out properties, primarily to grocery stores across the United States. The Company owns and operates 84 real estate properties in 21 states that comprise ~11 million square feet. Slate’s major tenants include Walmart, Lowe’s and Stop & Shop.
- Market Cap: $565 Million
- Month over Month Return: -0.8%
- FFO Per Share (TTM): $1.51
- FFO Yield: 11.56%
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own units in any of the companies mentioned above.
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