RioCan offers an exceptional combination of value and income at current levels, trading at just 12.0 times forecast 2026 cash flow per unit. Meanwhile, the monthly distribution yield is sustainably covered at a 60% payout ratio.
This investment case centers on a fortress-like portfolio of grocery-anchored, pharmacy plus value-retail properties in high-density Canadian markets that generate predictable cash flows regardless of economic cycles.
With plenty of growth ahead and a high payout, investors can have plenty of confidence in this long-term income favourite.
RIOCAN REAL ESTATE INVESTMENT TRUST (Toronto symbol REI.UN; www.riocan.com) owns all or part of 173 shopping centres and other properties across Canada. Canada, with 11 more under active development. Its overall occupancy rate is a high 97.8%.
RioCan continues to benefit from its October 2017 strategy to focus on six major urban markets: Toronto, Montreal, Ottawa, Calgary, Edmonton and Vancouver.
Retail properties provide 85% of RioCan’s rental revenue, followed by office (11%) and residential (4%).
Its biggest tenants (as of September 30, 2025) were Canadian Tire (4.7% of annualized rental revenue); TJX Companies (4.4%), which operates the Winners and Marshalls chains; Loblaw/Shoppers Drug Mart (4.3%); Metro/Jean Coutu (2.6%); and Cineplex (2.6%).
Despite the COVID-19 lockdowns, RioCan’s revenue rose 6.1%, from $1.14 billion in 2020 to $1.21 billion in 2022. Revenue then declined by 7.4% in 2023 to $1.12 billion due to lower sales of residential units. However, revenue rebounded by 10.3% in 2024 to $1.24 billion on improved
residential sales and occupancy rates.
Cash flow increased 7.3% from $507.4 million in 2020 to $544.3 million in 2024. On a per-unit basis, its cash flow rose 11.3%, from $1.60 in 2020 to $1.78 in 2024, due to fewer units outstanding.
RioCan, through a joint venture with the now-bankrupt Hudson’s Bay Company, owns 22% of 10 of 96 HBC stores. It also has a direct 50% stake in three more stores (HBC held the other 50% of two of those stores).
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The store closures forced RioCan to write down the value of the joint venture by $219.3 million. Even so, the REIT expects to fill all those vacated stores with new tenants, probably at higher rental rates.
RioCan’s strengthening focus offers plenty of stability and upside
In the third quarter of 2025, overall revenue rose 29.6%, to $371.2 million from $286.3 million a year earlier. That gain is mainly because RioCan sold residential condominiums for $74.9 million in the quarter, up from sales of just $1.5 million a year earlier.
Note—RioCan plans to sell its remaining residential properties over the next two years. That will let it focus better on its main retail properties.
However, lower income from equity investments and higher interest costs cut overall cash flow in the quarter by 0.9%, to $136.7 million from $137.9 million. Due to fewer units outstanding, cash flow per unit was unchanged at $0.46.
The REIT continues to get its existing tenants to renew their leases. In the latest quarter, the retention rate was 92.7%, up from 92.0% a year earlier.
RioCan’s portfolio remains anchored by recession-resistant, essential retailers (grocery stores, pharmacies, discount variety stores, and quick-service restaurants) that generate predictable customer traffic regardless of economic cycles. With grocery chains representing a significant tenant base and occupancy rates consistently above 97%, the trust benefits from the non-discretionary nature of food and pharmacy purchases.
Unlike lifestyle or discretionary retail, necessity-based properties maintain stable occupancy and allow landlords to capture inflation-driven rent growth.
The REIT increased your monthly distribution by 4.3% with the March 2025 payment. The units now yield a solid 5.8%. They trade at just 12.2 times the likely 2026 cash flow of $1.63 a unit.
Recommendation in The Successful Investor: RioCan REIT is a buy.
