Canadian Real Estate 06/30/26
Valuation Update And Preview Of A New US REIT Idea
Canadian Real Estate has delivered an attractive +13.2% ytd total return (XRE a/o 6/30). US REITs are +9.8%, and the CAD is -3.4% vs USD. Economically sensitive Retail and Industrial equities have been strong.
Sector Overview:
The yield premium of real estate cap rates over 10-year bond yields is near the middle of its historical range.
Canadian bond yields are over 100bp lower than in the US at every maturity.
Insiders at 21 of 36 REIT/REOCs were buyers since 1/1/26 and 7 had net insider sales. REIT/REOCs have repurchased $375mm of equity since 1/1 (reported to 6/30) with the largest buybacks at Boardwalk (3.9% of market cap), Clarke (3.7%), Dream Industrial (2.4% of market cap), and Dream Unlimited (1.0%).