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Granite Real Estate Investment Trust (GRT.UN)
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Dream Industrial Real Estate Investment Trust (DIR.UN)
Q: I only own two REITs in my entire portfolio - GRT.UN and DIR.UN, and both are down sustainably (25% and 15%, respectively). Do you see any lights at the of these two tunnels? I plan to sell both for tax losses if there are no chances of these two turning around before December. Your advice please.
5i Research Answer:
Both have recovered nicely from their lows, and both should continue to benefit from lower interest rates. Lower rates help both their fundamentals and investor sentiment. We like the industrial sector still the most of all REIT sectors and would be very comfortable owning these for income. That being said, it is a low-growth sector in general, and we would have no objections to a tax-loss/re-buy strategy. Other than earnings and/or acquisitions (which are difficult to predict) there are not a lot of catalysts to be expected. We highly doubt either will move enough before year end to offset the tax benefits picked up.