Here Are Three Best Buys In REITs

Article Excerpt

Top-quality REITs continue to have high occupancy rates and steady lease rates despite the economic slowdown. As well, lower interest rates will help REITs refinance mortgages at lower cost, or fund their expansion plans. We still advise against overindulging in REITs. But if you stick with REITs with strong cash flow and sound balance sheets, like the ones we recommend on this page, you should make attractive long-term returns with relatively low risk. RIOCAN REAL ESTATE INVESTMENT TRUST $14.30 (Toronto symbol REI.UN; Units outstanding: 221.2 million; Market cap: $3.2 billion; SI Rating: Average) is Canada’s largest REIT. RioCan has ownership interests in a portfolio of 238 retail malls across Canada, including 14 under development. These contain over 58 million square feet of leasable area. Portfolio occupancy stands at 97.0%. RioCan’s revenue in the three months ended September 30, 2008, was $185.5 million, up 7.6% from $172.5 million a year earlier. Cash flow per unit rose 2.8%, to $0.37 from $0.36. RioCan’s annual distribution…