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4 Canadian REITs with Higher, Safer Yields

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Reading time: 5 min.

We analyze the risk levels of four Canadian REITs with dividend yields that exceed their peer averages

SmallCapPower | November 17, 2017: Today we have identified four Canadian REITs with dividend yields averaging 9%. In order to assess the risk levels of current payouts, we have provided the Cash Distribution/Funds from Operations Ratio. The Cash Distributions/FFO ratio is used to determine what portion of a Company’s funds from operations are being used to pay distributions. The method is preferable to the traditional dividend payout ratio because it informs investors what portion of cash from operations was used to pay distributions, as opposed to net income, which is not cash reconciled. In addition, using cash distributions factors out the effects of Dividend Re-Investment Programs (DRIP), which pay out distributions in the form of additional units.

BTB Real Estate Investment Trust (TSX:BTB.UN) – $4.53
Commercial REITs

BTB Real Estate Investment Trust focuses on acquiring and renting out commercial, office and industrial properties across eastern Canada. Majority of the Trust’s assets are situated in Ontario and Quebec. BTB owns a total of 70 properties that cover more than 5.2 million square feet.

  • Market Cap: $219 Million
  • Dividend Yield: 9.3%
  • Cash Distributions/FFO Ratio: 80%
  • 1 Month Total Return:  -1.4%

True North Commercial REIT (TSX:TNT.UN) – $6.46
Commercial REITs

Founded in 2012, True North Commercial Real Estate Investment Trust focuses on acquiring and renting Canadian commercial real estate properties. Currently, True North owns over 32 properties that comprise approximately 2.16 million square feet. Majority of the Trust’s assets are situated in Ontario and New Brunswick.

  • Market Cap: $266 Million
  • Dividend Yield: 9.2%
  • Cash Distributions/FFO Ratio: 87%
  • 1 Month Total Return: 2.4%

Slate Office REIT (TSX:SOT.UN) – $8.18
Commercial REITs

Slate Office Real Estate Investment Trust focuses on acquiring and renting office properties across Canada’s major population centers. Currently, the Trust owns 38 office properties that comprise approximately 6.1 million square feet. Approximately half of its real estate assets are located in Ontario.

  • Market Cap: $466 Million
  • Dividend Yield: 9.2%
  • Cash Distributions/FFO Ratio: 88%
  • 1 Month Total Return: 1.0%

Inovalis Real Estate Investment Trust (TSX:INO.UN) – $10.12
Real Estate Services

Inovalis Real Estate Investment Trust focuses on acquiring and renting out office properties in Europe. The Company’s portfolio consists of 10 properties comprising 1.45 million square feet, primarily in France and Germany. The Company aims to acquire properties strategically located in major cities and town centers, with easy access to public transit, ensuring longer lease terms with tenants.

  • Market Cap: $219 Million
  • Dividend Yield: 8.2%
  • Cash Distributions/FFO Ratio: 95%
  • 1 Month Total Return: 0.5%

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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