The Canadian real estate sector has faced major challenges in 2022. The Bank of Canada has proceeded with an aggressive rate tightening policy to dampen the soaring inflation we have experienced this year. Despite the grim outlook for housing in the near term, investors should not entirely turn their back on real estate investment trusts (REITs).
Earlier this year, a released Canadian Bank of Imperial Commerce analysis predicted that REITs and their tasty yields would not be impacted until 2025. That is good news for Canadian investors who are hungry for income.
Slate Office REIT (TSX:SOT) is a Toronto-based REIT that owns and operates North American office real estate. Shares of this REIT have dropped 9.7% in 2022 as of close on November 29. That has pushed the stock into negative territory in the year-over-year period.
This company released its third quarter fiscal 2022 results on November 1. Rental revenues climbed 16% from the previous year to $50.9 million. Meanwhile, net operating income (NOI) jumped 16% to $26.8 million. Total assets increased 8.1% from the prior year to $1.95 billion. Moreover, net income jumped to $83.8 million compared to $39.6 million in the third quarter of fiscal 2022. Adjusted EBITDA was reported at $90.8 million – up from $83.1 million in the previous year.
Shares of this REIT currently possess a very favourable price-to-earnings ratio of 4.5. Better yet, Slate Office REIT offers a monthly dividend of $0.033 per share. That represents a monster 8.8% yield.
