Our three REIT buys offer steady income

Article Excerpt

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. RIOCAN REAL ESTATE INVESTMENT TRUST $19.13 (Toronto symbol REI.UN; Units outstanding: 241.2 million; Market cap: $4.6 billion; SI Rating: Average; Dividend yield: 7.2%) is Canada’s largest REIT. RioCan has interests in 253 shopping malls across Canada, including 13 under development. In all, these contain over 60 million square feet of leasable area. RioCan has a 97.3% occupancy rate. RioCan generated revenue of $179.9 million…