Actual property funding trusts, or REITs, personal and function a portfolio of income-generating properties. Sometimes, REITs distribute the vast majority of the rental earnings to shareholders as dividends. Investing in REITs diversifies your fairness portfolio and means that you can start a passive earnings stream at a low value.

Nonetheless, REITs have to generate ample earnings to take care of their curiosity funds and dividend payout, whereas investing in property growth and acquisition. On this article, I’ve recognized one Canadian REIT that might be the most secure earnings play on the TSX. Let’s see why.

Is that this Canadian REIT purchase?

Valued at a market cap of $4.84 billion, Granite REIT (TSX:GRT.UN) delivered sturdy operational efficiency in 2024. The economic property proprietor elevated funds from operations (FFO) per unit by 9.5% to $5.44 per share whereas adjusted FFO climbed 8.0% to $4.86 per share, marking the 14th consecutive 12 months of distribution will increase. Administration raised the annual payout 3.03% to $3.40 per unit whereas sustaining a conservative 68% adjusted FFO payout ratio.

The REIT ended 2024 with 138 income-producing properties plus 5 growth websites totalling 63.3 million sq. toes throughout 5 international locations with 95% occupancy.

Property values reached $9.4 billion with a weighted common lease time period of 5.7 years. Granite diminished publicity to anchor tenant Magna to only 19% of gross leasable space from 93% in 2012, whereas increasing the distribution and e-commerce section to 48.8 million sq. toes, representing 77% of portfolio worth.

Identical-property internet working earnings on a relentless foreign money foundation grew 5.9% final 12 months whereas the web leverage ratio stood at 32%, offering $1.1 billion in out there liquidity.

In 2024, administration renewed 10 million sq. toes at a 15% common hire improve with a powerful 92% renewal charge. The REIT accomplished three growth tasks totalling 0.5 million sq. toes for $107 million at a mean 6.8% yield on value whereas issuing $800 million in debentures to refinance near-term maturities.

The corporate repurchased $121.3 million price of items by means of June whereas sustaining its BBB funding grade ranking and advancing sustainability initiatives, together with 49.8 megawatts of operational photo voltaic capability throughout 17 properties.

Granite REIT delivered outcomes that exceeded expectations within the second quarter of 2025, although foreign money headwinds quickly masked its operational momentum. The REIT posted funds from operations of $1.39 per unit, a 5.3% improve in comparison with the identical interval final 12 months.

The belief executed 1.3 million sq. toes of lease renewals through the interval, a 40% weighted common improve on leases that expired in 2025. The leasing group additionally secured 1.1 million sq. toes of latest leases anticipated to generate over $10.5 million in gross hire throughout their first 12 months. One standout deal in Atlanta noticed rental charges soar 58% above the earlier tenant’s charge.

What’s subsequent for the TSX REIT?

Administration raised its full-year steerage primarily based on this momentum, now projecting FFO per unit between $5.75 and $5.90, representing 6% to 9% progress over 2024. The corporate additionally elevated its same-property internet working earnings forecast to a variety of 5% to six.5% on a relentless foreign money foundation, up from the earlier estimate of 4.5% to six%.

Granite continued to purchase again items through the quarter, repurchasing 2.2 million items 12 months to this point at a mean value of $67.01 for complete consideration of roughly $145 million. These buybacks have confirmed accretive to per-unit metrics whilst the corporate drew $91 million on its credit score facility to fund the purchases. The REIT expects to pay down this stability all through the rest of 2025 utilizing free money move from operations.

The belief quickly noticed its internet leverage ratio improve to 36% from 32% within the earlier quarter, as a result of 5 properties categorised as held on the market had been excluded from asset values. Administration expects leverage metrics to normalize as soon as these tendencies shut.

Granite REIT is predicted to pay shareholders an annual dividend per share of $3.40, up from $3.30 in 2024. These payouts are forecast to extend to $3.61 per share in 2027, enhancing the efficient yield to 4.5% from 4.3%.