Commercial real estate took a hit at the onset of the COVID-19 pandemic. A collapse in rental income stood as a huge threat to the industry. Fortunately, considerable government support in the wake of new restrictions and lockdowns has stabilized the sector. Now, with a recovery on the horizon, investors seeking income should turn their attention to real estate investment trusts (REITs).
Northwest Healthcare Properties REIT (TSX:NWH.UN) remains my favourite REIT to hold in this environment. It has proven to be a great defensive option in the face of the pandemic. The REIT offers investors exposure to a global portfolio of high-quality health-care real estate. Shares of Northwest have increased 4.6% in 2021 as of late afternoon trading on March 31. The stock is up 34% from the prior year.
In 2020, IFRS revenue rose 2.1% year-over-year to $374 million. Meanwhile, adjusted funds from operations (AFFO) per unit posted growth of 1%. Total assets under management increased by 20% to $7.8 billion. Shares of Northwest possess an attractive price-to-earnings ratio of 8.3. Better yet, it offers a monthly dividend of $0.067 per share. That represents a tasty 6.1% yield.
SmartCentres REIT (TSX:SRU.UN) is another REIT worth stashing in uncertain time. This REIT offers stellar diversification with over 160 strategically located properties across Canada. Its shares have climbed 17% in 2021 so far. The stock is up 43% from the prior year. This REIT offers a monthly dividend of $0.154 per share. That represents a very strong 6.8% yield.
