RBC Analyst Predicts Promising Growth for These REITs
RBC Analyst Predicts Promising Growth for REITs
RBC Capital Markets analyst Pammi Bir has provided a cautious yet optimistic outlook on the Real Estate Investment Trust (REIT) sector, projecting key growth trends for 2025 and highlighting potential standout performers for 2026.
Growth Predictions for the REIT Sector
Bir estimates a 3% average year-over-year growth in funds from operations per unit (FFOPU) for the REIT sector in the fourth quarter of 2025. This reflects an increase from the previous quarter’s 2% growth. However, growth expectations vary significantly across subsectors:
- Self-storage: Anticipated to lead with a 6% increase.
- Seniors housing: Expected to grow by 5%.
- Multi-family: Also projected to rise by 5%.
- Industrial: Forecasted to increase by 2%.
- Retail: Expected growth of 2%.
- Office: Projected to decline by 3%.
- Diversifieds: Anticipated to decline by 9%.
2026 Organic Growth Expectations
Looking ahead to 2026, Bir suggests that while organic growth may temper, seniors housing is likely to remain a leader in single property net operating income (SP NOI) and earnings growth. The overall growth for SP NOI across the REIT sector in 2026 is expected to fall within the low-to-mid single digits.
Self-storage has shown resilience, with market fundamentals indicating a potential bottoming out. Retail is also stabilizing, with fewer tenant bankruptcies reported so far in 2026. The organic net operating income (NOI) growth for the sector is predicted between 2% to 4%, driven by strong demand and limited new supply.
Key Picks Among REITs
Bir favors a selection of REITs expected to offer substantial upside. The key names identified are:
- Boardwalk REIT
- BSR REIT
- CAPREIT
- Flagship Communities REIT
- Killam Apartment REIT
- Minto Apartment REIT
- Chartwell Retirement Residences
- Extendicare Inc.
- Sienna Senior Living
- Dream Office REIT
- Granite REIT
- First Capital REIT
- Primaris REIT
- RioCan REIT
- SmartCentres REIT
- H&R REIT
- StorageVault Canada Inc.
In conclusion, while the REIT sector faces challenges, analysts predict promising growth in specific subsectors and recommend investors pay attention to the strong performers identified for the upcoming years. For more insights on investment opportunities, continue following updates at Filmogaz.com.
