What is the best REIT to buy in Canada?

Top Canadian REITs include Granite REIT, CT REIT, and Canadian Apartment Properties REIT. The best choice depends on your goals — industrial REITs for growth, residential for stability, or diversified for balance.

Are REITs a good investment in Canada?

REITs can be excellent for income (4-7% yields), diversification, and real estate exposure without property management. They're liquid, professionally managed, and accessible with small amounts.

How are REITs taxed in Canada?

REIT distributions have complex tax treatment — portions are interest, dividends, capital gains, or return of capital. Hold REITs in TFSAs or RRSPs when possible to simplify taxes.

Best REITs in Canada 2026 | Top Real Estate Investment Trusts

Top Canadian REITs by Sector

Industrial REITs

REIT	Ticker	Yield	Focus
Granite REIT	GRT.UN	~4.0%	Warehouses, distribution
Summit Industrial	SMU.UN	~4.5%	Light industrial
WPT Industrial	WIR.U	~4.8%	US industrial (CAD-traded)
Dream Industrial	DIR.UN	~5.0%	Industrial, logistics

Why industrial: E-commerce demand drives warehouse/logistics growth.

Residential REITs

REIT	Ticker	Yield	Focus
Canadian Apartment Properties (CAPREIT)	CAR.UN	~3.5%	Multi-family apartments
Minto Apartment REIT	MI.UN	~4.0%	Urban apartments
InterRent REIT	IIP.UN	~3.2%	Value-add apartments
Killam Apartment REIT	KMP.UN	~4.5%	Atlantic Canada focus

Why residential: Housing demand stays strong; defensive in downturns.

Retail REITs

REIT	Ticker	Yield	Focus
CT REIT	CRT.UN	~5.5%	Canadian Tire properties
RioCan REIT	REI.UN	~5.8%	Retail, mixed-use
SmartCentres REIT	SRU.UN	~7.0%	Walmart-anchored
First Capital REIT	FCR.UN	~4.5%	Urban grocery-anchored
Choice Properties	CHP.UN	~5.0%	Loblaw-anchored

Why retail: Grocery-anchored and necessity retail are resilient.

Office REITs

REIT	Ticker	Yield	Focus
Allied Properties REIT	AP.UN	~9.0%	Urban, creative office
Dream Office REIT	D.UN	~8.5%	Urban office
True North Commercial	TNT.UN	~10%+	Suburban office

Caution: Office sector faces WFH headwinds. Higher yields reflect risk.

Diversified REITs

REIT	Ticker	Yield	Focus
H&R REIT	HR.UN	~5.0%	Office, retail, industrial
Dream REIT	DRM.UN	~5.5%	Diversified
Artis REIT	AX.UN	~6.5%	Office, retail, industrial

Healthcare REITs

REIT	Ticker	Yield	Focus
NorthWest Healthcare	NWH.UN	~7.0%	Medical offices, hospitals
Chartwell Retirement	CSH.UN	~4.5%	Seniors housing
Sienna Senior Living	SIA	~6.0%	Long-term care

Why healthcare: Aging population drives demand.

REIT ETFs (Diversified Exposure)

ETF	Ticker	Yield	MER	Holdings
BMO Equal Weight REITs	ZRE	~4.5%	0.61%	23 REITs
iShares S&P/TSX Capped REIT	XRE	~4.2%	0.61%	18 REITs
Vanguard FTSE Canadian Capped REIT	VRE	~4.0%	0.38%	17 REITs
CI First Asset Canadian REIT	RIT	~4.8%	0.87%	20 REITs

ETF advantage: Instant diversification across REIT sectors.

How to Evaluate REITs

Key Metrics

Metric	What It Means	Good Range
FFO (Funds from Operations)	Cash flow measure	Growing
AFFO (Adjusted FFO)	More accurate cash flow	Growing
Payout ratio	Distributions ÷ AFFO	70-90%
NAV (Net Asset Value)	Property value per unit	Trading near NAV
Debt/Assets	Leverage	Under 50%
Occupancy rate	% of space rented	95%+
Lease term	Avg remaining lease	5+ years

Valuation

Metric	Calculation	Use
Price/FFO	Price ÷ FFO per unit	Like P/E for REITs
Price/NAV	Compare to property value	Under 1.0 = discount
Yield	Distribution ÷ Price	Higher = more income

REIT Distributions

How They Work

Component	Description	Tax Treatment
Interest income	From mortgages	Fully taxable
Canadian dividends	From taxable corps	Dividend tax credit
Capital gains	From property sales	50% taxable
Return of capital (ROC)	Tax-deferred	Reduces ACB*
Foreign income	Non-Canadian	Fully taxable

*ROC defers tax until sale; increases capital gain later.

Annual T3/T5 Breakdown

Each REIT sends tax slips showing the split. Example:

Component	Percentage
Interest	30%
Capital gains	10%
Return of capital	45%
Foreign income	15%

Tax-Efficient REIT Holding

Best Account for REITs

Account	Why
TFSA	Tax-free growth; no tax slip complexity
RRSP	Tax-deferred; good for high distributions
Non-registered	Complex tax; ROC tracking required

Recommendation: Hold REITs in TFSA or RRSP to avoid annual tax complexity.

US REITs

Consideration	Details
Withholding tax	15% on distributions (treaty rate)
RRSP	Exempt from withholding
TFSA	Subject to 15% withholding
Non-registered	15% withholding (foreign tax credit)

REITs vs Physical Real Estate

Factor	REITs	Physical Property
Minimum investment	$100	$50,000-$200,000+
Liquidity	Sell instantly	Months to sell
Diversification	Multiple properties	Usually single property
Management	Professional	You or hire
Leverage	Built-in	Mortgage required
Tax complexity	Annual T3/T5	Rental income reporting
Control	None	Full
Upside	Limited	Unlimited

Building a REIT Portfolio

Sample Allocations

Balanced (Income + Growth)

Sector	Allocation	Example
Industrial	25%	Granite (GRT.UN)
Residential	25%	CAPREIT (CAR.UN)
Retail	25%	CT REIT (CRT.UN)
Healthcare	15%	NorthWest (NWH.UN)
Diversified	10%	H&R (HR.UN)

High Income

Sector	Allocation	Example
Retail	35%	SmartCentres (SRU.UN)
Healthcare	25%	NorthWest (NWH.UN)
Diversified	25%	H&R (HR.UN)
Industrial	15%	Dream Industrial (DIR.UN)

Growth-Focused

Sector	Allocation	Example
Industrial	40%	Granite (GRT.UN)
Residential	40%	InterRent (IIP.UN)
Data centers	20%	US data center REITs

Simple Approach: One ETF

Option	Ticker
Lowest cost	VRE
Equal weight	ZRE
Broadest	XRE

REIT Risks

Risk	Description	Mitigation
Interest rate sensitivity	REITs fall when rates rise	Diversify, long view
Sector risk	Office struggling post-COVID	Avoid/limit office
Economic cycles	Retail weak in recession	Focus on necessity retail
Tenant concentration	One big tenant leaves	Check tenant list
Leverage risk	High debt amplifies losses	Under 50% debt/assets
Distribution cut	REIT reduces payout	Check payout ratio

When REITs Perform Best

Environment	REIT Performance
Falling interest rates	Generally positive
Rising rates	Often negative
Economic growth	Positive (higher rents)
Recession	Sector-dependent
High inflation	Mixed (some pass-through)