Favorite Canadian REITs for 2H 2025

Hi everybody,

Tonight I thought I would share some views about a handful of REITs I am excited for through the 2H of the year. While there are a number of other interesting names that I did not mention here, I handpicked the ones I think which could offer the best risk-reward upside. Absent a sector rotation, I believe we should focus on ‘catalyst’ driven investing in the space. Should we get a sector rotation back into income paying equities then larger cap names like Riocan or a Dream Industrial will see a stronger bid. Small cap names have very little eyes on them in the short-run and sentiment in the REIT space remains at historical worst with very little interest as bond yields in the United States have remained rather elevated with continued macro uncertainty.

Despite, I still see significant opportunity in the space with bond yields where they are. The obvious expectation is that bond yields continue to fall in Canada as early as the next bank of Canada meeting whereas in the United States, the situation seems to vary from macro print to macro print! Lower interest rates will help with cap rate compression which should help bolster NAVs, which have seen fair market value writedowns as cap rates expanded in the past few years, in addition lower government bond yields will likely encourage investors to seek alternative income sources, of which, the REIT space has historically been a favorite for Canadians. NCP is also of the view there are a number of ‘stalled’ transaction on the sidelines, of which, may include privatizations, M&A or largescale asset sales as bond yields stabilize and the macro environment becomes more known.

Below I have provided a list of 5 current favorite Canadian-listed REITs which I believe could offer meaningful upside in 2H 2025.

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