Q: REITs have declined substantially since 2022. The payout has remained steady, but the market value of units has dropped.
What needs to happen in the markets to create a turnaround in this sector?
What needs to happen in the markets to create a turnaround in this sector?
5i Research Answer:
Rates coming down further to help stimulate development activities and housing market activity would likely be key. The recent news of Canada slowing immigration over the next few years could be another headwind to rental growth. Overall, it is mainly rates and general improved economic conditions to help the real estate market improve. This will help portfolios appreciate in value, allow REITs to execute on pipeline opportunities, and grow payouts, but there is still work to be done here.
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