These 2 Canadian REITs Have Dividend Yields of Over 3%

Investing in Canadian REITs, such as Killam Apartment, offers portfolio diversification and the opportunity to create a passive-income stream.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investing in real estate investment trusts (REITs) enables investors to diversify their portfolios. As owning real estate can be extremely capital intensive and illiquid, buying shares of REITs can help you gain access to this asset class.

Further, due to steady cash flows, a majority of REITs in Canada pay investors a tasty dividend yield. So, you can create a recurring income stream by investing in REITs. I have shortlisted two quality Canadian REITs you can buy in September.

Killam Apartment REIT

A growth-oriented Canadian REIT, Killam Apartment (TSX:KMP.UN) owns, operates, and develops apartments and MHCs (manufactured home communities). It owns a $4.8 billion portfolio of real estate properties across Ontario, Atlantic Canada, British Columbia, and Alberta.

Killam Apartment aims to consistently increase funds from operations and net asset value to enhance shareholder returns. It has successfully increased earnings from its existing portfolio as well as by expanding via acquisitions.

It owns 249 properties, including 203 apartment properties, 39 MHCs, and seven commercial properties. The REIT has 16,701 apartment units and 5,875 MHC units at the end of the second quarter (Q2) of 2022.

Due to its widening portfolio of cash-generating properties, Killam Apartment pays investors a monthly dividend of $0.058 per share, indicating a forward yield of 4.2%. Since January 2016, the REIT has returned 114% to investors after adjusting for dividends.

Killam Apartment continues to acquire and build properties. For example, The Kay is a 128-unit development located in Mississauga, which opened to tenants in April 2022. The asset generated $12.5 million in fair value gains since the project began in 2019 and is expected to contribute $2.6 million to net operating income each year.

Killam’s pipeline includes four new developments totaling 488 units. Killam also invested $43.4 million in Q2 in its active development projects.

Summit Industrial Income REIT

An open-ended mutual fund trust, Summit Industrial Income REIT (TSX:SMU.UN) owns and manages a portfolio of light industrial properties in Canada.

It is among the top-performing REITs on the TSX and has returned over 600% to investors in dividend-adjusted gains since September 2012. Despite its market-beating returns, Summit Industrial offers investors a tasty dividend yield of 3.1%.

In order to optimize cash flows and performance, Killam Apartment focuses on tenant retention, a focused capital-expenditure program, and optimization of rental rates. The industrial sector is Canada’s largest commercial real estate asset class, with more than 1.7 billion square feet of space.

But as the sector remains fragmented, Summit Industrial is well poised to accelerate industry-wide consolidation through accretive acquisitions in major industrial markets. Summit Industrial intends to acquire a diverse range of industrial spaces to further diversify its portfolio.

The REIT ended Q2 with interests in 160 properties spanning 21.6 million square feet of gross leasable area. In the first six months of 2022, Summit reported revenue of $121.37 million with an occupancy rate of 99.1%. Its funds from operations rose almost 30% to $68.84 million compared to $54.25 million in the year-ago period.

An investment of $10,000 in each of the two Canadian REITs will help investors generate $720 in annual dividend income.

Should you invest $1,000 in Brookfield Renewable Partners right now?

Before you buy stock in Brookfield Renewable Partners, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Brookfield Renewable Partners wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Killam Apartment REIT. The Motley Fool recommends SUMMIT INDUSTRIAL INCOME REIT.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

sale discount best price
Dividend Stocks

This Monthly Dividend Stock at $53 Is Too Cheap to Ignore

There are plenty of great dividend stocks on the market to consider buying, but this monthly gem is just too…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

The Best Canadian ETFs $1,000 Can Buy on the TSX Today

If you're looking for ETFs that can turn $1,000 into strong cash flow, then these are the ones I'd go…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

Where I’d Invest my TFSA Savings in the TSX Today

If you want the stability of defence with the growth from tech, this is the ideal stock.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How I’d Invest $7,000 in My TFSA to Earn $50 in Monthly Income

High-yield stocks like Freehold Royalties, which is yielding more than 9%, are prime candidates for your TFSA.

Read more »

dividend growth for passive income
Dividend Stocks

4 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These dividend stocks can certainly stand the test of time, and have already done so for many investors.

Read more »

Stethoscope with dollar shaped cord
Dividend Stocks

I’d Put My Entire $7,000 TFSA Into This Single Dividend Stock

TFSA investors can consider putting their $7,000 limit into a top-performing TSX stock in 2025.

Read more »

Happy golf player walks the course
Dividend Stocks

How I’d Turn $5,000 Into a Passive Income Stream This Year

These two high yield TSX stocks offer secured payouts, making them top bets to start building a passive income portfolio…

Read more »

four people hold happy emoji masks
Dividend Stocks

2 Oversold TSX Dividend Stocks to Watch in 2025

These industry leaders have great track records of dividend growth.

Read more »