New properties should spur their distributions

Article Excerpt

These two REITs are shifting their focus to more-profitable properties. That bodes well for future distribution increases. H&R REAL ESTATE INVESTMENT TRUST $12 is a top pick for 2022. The REIT (Toronto symbol HR.UN; Cyclical-Growth Dividend Payer Portfolio, Manufacturing sector; Units outstanding: 279.1 million; Market cap: $3.3 billion; Distribution yield: 4.6%; Dividend Sustainability Rating: Average; www.hr-reit.com) recently spun off most of its retail properties, including all of its enclosed shopping malls, to publicly traded Primaris Real Estate Investment Trust (symbol PMZ.UN on Toronto). It created Primaris with the Healthcare of Ontario Pension Plan (HOOPP). The spinoff is part of H&R’s strategy to focus on its more-promising residential and industrial properties in Toronto, Montreal, Vancouver, and the U.S. Sun Belt and Gateway cities (which contain corporate headquarters, educational and cultural institutions). That plan is starting to pay off: H&R’s net asset value per unit rose 19.0%, to $21.06 as of March 31, 2022, from $17.70 at the end of 2021. That prompted the REIT to increase your monthly…

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