canadian reit
Toronto symbol REF.UN, focuses on acquiring properties in prime locations, usually near major metropolitan centres. That attracts strong tenants, maintains high occupancy rates and delivers a reliable stream of rental income.
Most real estate investment trusts (REITs), including our recommendations, are exempt from Ottawa’s new tax on income-trust distributions, which comes into effect on January 1, 2011. As a result, these REITs should attract more investor interest in the second half of 2010, as the tax prompts more trusts to convert to corporations and cut their distributions. RIOCAN REAL ESTATE INVESTMENT TRUST $19.32 (Toronto symbol REI.UN; Units outstanding: 242.9 million; Market cap: $4.7 billion; SI Rating: Average; Dividend yield: 7.1%) is Canada’s largest REIT. RioCan has interests in 265 shopping malls across Canada, including 12 under development. In all, these properties contain over 60 million square feet of leasable area. The trust has a 97.0% occupancy rate. In the three months ended March 31, 2010, RioCan’s revenue was $214.6 million. That’s up 12.3% from $191.1 million a year earlier. Cash flow per unit rose 12.5%, to $0.36 from $0.32. The trust paid higher interest costs during the quarter, but contributions from newly acquired shopping centres and gains on property sales helped offset these expenses. The trust’s units yield 7.1%....
ISHARES CDN REIT SECTOR INDEX FUND $12.05 (Toronto symbol XRE; buy or sell through a broker) holds the 10 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of this index’s value. RioCan REIT is the fund’s largest holding, at 23.7%, followed by H&R REIT (15.7%), Canadian REIT (12.0%), Boardwalk REIT (9.9%), Calloway REIT (9.1%), Primaris Retail REIT (6.8%), Canadian Apartment Properties REIT (6.5%), Chartwell Seniors Housing REIT (5.8%), Cominar REIT (5.7%) and Extendicare REIT (4.2%). The fund yields 5.4%. Most REITs, including those held by the iShares CDN REIT Sector Index Fund, are exempt from Ottawa’s new income-trust tax, which takes effect on January 1, 2011. That will keep the fund’s distributions high. Its expenses are 0.55% of its assets....
Most real estate investment trusts (REITs), including our recommendations, are exempt from Ottawa’s income-trust tax, which comes into effect on January 1, 2011. As a result, these REITs should attract investor interest this year, as many income trusts convert to corporations and cut their distributions. Even so, we advise against overindulging in REITs. But if you stick with REITs that have steady cash flows and sound balance sheets, like the two we recommend on this page, you should earn attractive long-term returns at relatively low risk. RIOCAN REAL ESTATE INVESTMENT TRUST $18.73 (Toronto symbol REI.UN; Units outstanding: 241.8 million; Market cap: $4.5 billion; SI Rating: Average; Dividend yield: 7.4%) is Canada’s largest REIT. RioCan has interests in 258 shopping malls across Canada, including 12 under development. In all, these properties contain over 60 million square feet of leasable area. The trust has a 97.4% occupancy rate....
ISHARES CDN REIT SECTOR INDEX FUND $12.03 (Toronto symbol XRE; buy or sell through a broker) holds the 10 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of this index’s value. RioCan REIT makes up 23.7% of the iShares CDN REIT’s total value, followed by H&R REIT (15.7%), Canadian REIT (12.0%), Boardwalk REIT (9.9%), Calloway REIT (9.1%), Primaris Retail REIT (6.8%), Canadian Apartment Properties REIT (6.5%), Chartwell Seniors Housing REIT (5.8%), Cominar REIT (5.7%) and Extendicare REIT (4.2%). The fund yields 5.7%. Its expenses are 0.55% of its assets....
The best real estate investment trusts (REITs) continue to have high occupancy rates. They are also renewing leases at a steady pace. As well, today’s low interest rates are helping many REITs save money on mortgage refinancing, or fund expansion. Most REITs, including our recommendations, are exempt from Ottawa’s new income-trust tax, which comes into effect on January 1, 2011. We still advise against overindulging in REITs. But if you stick with REITs that have steady cash flows and sound balance sheets, like the three we recommend on this page, you should earn attractive long-term returns at relatively low risk....
You’ll find our mutual-fund ratings (Aggressive, Conservative or Income) displayed next to every fund we recommend in our Canadian Wealth Advisor newsletter. They’re key to helping us find top-performing funds, including those that are suitable for income investing. (To show you how our system works, we’d like to share one of the income investing fund buys we recently recommended in Canadian Wealth Advisor. Please read on for full details.) Rating mutual funds is more complex than rating individual companies. When we judge a company’s investment quality, we take nine key factors into account....
GUARDIAN MONTHLY HIGH INCOME II FUND $10.66 (CWA Rating: Income) (GGOF Guardian Group of Funds, Commerce Court West, Suite 4100, P.O. Box 201, Toronto, Ontario M5L 1E8. 1-800-668-5613; Web site: www.ggof.com. Available from brokers) continues to emphasize more stable real estate investment trusts (REITs) and high-quality, long-lived resource trusts that pay out a low percentage of cash flow as distributions. This should help the fund keep distributions high even after Ottawa’s tax changes in 2011. Guardian Monthly High Income II pays a $0.06 monthly distribution, for a 6.8% yield. The fund has an MER of 2.30%....
ISHARES CDN REIT SECTOR INDEX FUND $10.16 (Toronto symbol XRE; buy or sell through a broker) holds the 11 Canadian real estate investment trusts (REITs) in the S&P/TSX Capped REIT Index. The weight of any one REIT is limited to 25% of this index’s value. RioCan REIT makes up 24.9% of the index’s total value; H&R REIT, 14.7%; Canadian REIT, 11.5%; Boardwalk REIT, 10.3%; Calloway REIT, 8.5%; Canadian Apartment Properties REIT, 6.6%; Primaris Retail REIT, 6.1%; Cominar REIT, 5.3%; Chartwell Seniors Housing REIT, 4.6%; Extendicare REIT, 3.8%; and InnVest REIT, 2.0%. iShares CDN REIT yields 8.3%. Its expenses are 0.55% of its assets....
Canadian REIT and Pembina Pipeline Income Fund are both recommendations of our Canadian Wealth Advisor newsletter. We see them both as buys. Crescent Point Energy Trust recently converted itself into a conventional corporation. Its new name is Crescent Point Energy Corp. (symbol CPG on Toronto). Crescent Point Energy Corp. is still a buy recommendation of Canadian Wealth Advisor. Canadian Oil Sands Trust, $25.34, symbol COS.UN on Toronto (Units outstanding: 484.4 million; Market cap: $12.3 billion), has a 36.74% interest in Syncrude Canada Ltd. Canadian Oil Sands’ share of Syncrude’s oil production is about 109,500 barrels per day. The trust’s focus on high-cost oil-sands production exposes it to more uncertainty than other high-quality oil companies, and leaves it with more to lose when oil prices fall. Moreover, oil-sands developments may become subject to increasingly strict environmental regulations. The units yield 2.4%. Canadian Oil Sands Trust is okay to hold. Labrador Iron Ore Royalty Income Fund, $31.50, symbol LIF.UN on Toronto (Units outstanding: 32 million; Market cap: $1 billion), has been hurt by weaker iron-ore markets, and will delay its expansion plans in order to conserve cash. It is possible that government infrastructure spending will increase steel production. This, in turn, may help increase demand. Labrador Iron Ore Income Fund has seen higher demand from Asia lately, but it needs an overall recovery in global steel production to see rising sales and cash flow. The units yield 6.4%. Labrador Iron Ore Royalty Income Fund is okay to hold....
CANADIAN REIT $24.60 (Toronto symbol REF.UN; Units outstanding: 66.2 million; Market cap: $1.6 billion; SI Rating: Extra Risk) owns more than 160 properties. These consist of retail, industrial and office buildings located across Canada and in the Chicago, Illinois, area. Canadian REIT’s occupancy rate is 96.5%. The trust buys properties in prime locations, usually near major cities, that attract strong tenants, maintain high occupancy rates and deliver a reliable stream of rental income. In the three months ended March 31, 2009, Canadian REIT’s revenue was $85 million, up 9.9% from $77.4 million a year earlier. Cash flow per unit rose 10%, to $0.55 from $0.50. The units yield 5.5%....