When markets begin to really feel shaky, many traders head straight for security. Some go for gold, others maintain money, however many good Canadians look to actual property. Not simply any actual property funding, however ones that present dependable revenue, regular progress, and insulation from retail or workplace volatility. Among the best locations to start out, particularly you probably have $1,000 to take a position, is perhaps Granite Actual Property Funding Belief (TSX:GRT.UN). It’s not a family title, but it surely positively must be.
Why Granite
Granite is a REIT that focuses virtually fully on logistics and industrial properties. So as a substitute of buying malls or condominium buildings, it owns warehouses and distribution centres. These are the buildings that preserve provide chains shifting and on-line orders arriving on time. It’s part of the financial system that’s grow to be important, particularly as e-commerce continues to growth.
With tenants like Amazon and Magna Worldwide, Granite’s portfolio is each diversified and reliable. As of writing, it owns over 140 income-producing properties unfold throughout Canada, the U.S., and Europe. That geographic unfold provides some international resilience, whereas the tenant listing speaks volumes about its reliability.
Proof within the numbers
Granite not too long ago launched its first-quarter earnings for 2025, and the numbers had been robust. Rental income got here in at $154.7 million, up from $138.9 million the yr earlier than. Internet working revenue was $125.7 million, additionally exhibiting regular progress. It reported $91 million in funds from operations (FFO), or $1.46 per unit, which is up from $1.30 a yr earlier. FFO is a key metric for REITs, and rising FFO normally means extra potential money for distributions.
Even higher, adjusted funds from operations (AFFO) hit $88.4 million, or $1.41 per unit, in comparison with $1.22 the earlier yr. That’s a formidable enhance and speaks to Granite’s effectivity and rising profitability. The AFFO payout ratio dropped to 60% from 67%, which reveals the dividend is not only sustainable, it’s well-covered.
One other brilliant spot is the steadiness sheet. Granite completed the quarter with about $3.2 billion in complete debt, however its leverage ratio sat at simply 32%. That’s low in comparison with many REITs, giving it room to develop or climate headwinds. It additionally repurchased practically one million items beneath its buyback plan, spending $63.6 million at a mean value of $68.30. That form of buyback reveals the corporate thinks its personal inventory is undervalued, and it’s placing cash behind that perception.
Extra to return
Occupancy remained robust at 94.8%, with rental spreads of about 10% over expiring leases. This implies Granite isn’t simply conserving its tenants, it’s elevating rents as leases renew. It accomplished over 736,000 sq. ft of leasing exercise throughout the quarter, a wholesome register any actual property market. Lengthy-term leases and high-quality tenants assist defend its money circulation, even in unsure occasions.
As of writing, Granite’s inventory was buying and selling at round $67.23. It pays an annual dividend of $3.40, which supplies it a yield of roughly 5.1%. That’s a beneficiant payout from an organization with glorious financials and a defensive portfolio. Over time, these funds can compound, particularly if reinvested.
What’s extra, Granite is well-positioned for long-term progress. Demand for warehouses and logistics centres is barely rising, due to shifts in international provide chains, rising e-commerce, and just-in-case stock methods. New development for all these buildings hasn’t stored up with demand, particularly close to city centres. That bodes properly for Granite, as larger demand and restricted provide normally imply higher rental revenue and property values.
Backside line
So in the event you’re sitting on $1,000 and questioning the place to place it, Granite REIT deserves your consideration. You’re not simply shopping for a inventory, you’re shopping for right into a rising international portfolio of important infrastructure. You’re amassing revenue whilst you wait. And also you’re proudly owning a bit of one thing that isn’t going out of favor anytime quickly.
