Published on April 9th, 2025 by Nathan Parsh
Real estate investment trusts, or REITs, can offer highly attractive income yields. They are required to pay the majority of their profits as dividends to their shareholders.
This is why many retirees and other income investors like to invest in REITs, although not all REITs are equally well-liked. It can make sense to look for REITs outside of the US, as there are attractive and reliable dividend payers in other countries as well. This includes RioCan Real Estate Investment Trust (RIOCF), for example, which is a Canadian REIT.
RioCan REIT is a somewhat special REIT because it pays monthly dividends. While some other REITs also pay monthly dividends, most offer quarterly dividend payments to their owners.
There are currently just 76 monthly dividend stocks. You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:
RioCan REIT offers a dividend yield of 7.5% at current prices, five times the S&P 500’s yield of 1.5%.
The above-average dividend yield and RioCan’s monthly dividend payments make the REIT worthy of research for income investors. This article will discuss the investment prospects of RioCan REIT in detail.
Business Overview
RioCan is a real estate investment trust that was founded in 1993 by Ed Sonshine, making it one of the first REITs in Canada overall. RioCan is headquartered in Toronto, Canada, and is one of the largest REITs in the country. The company currently has a market capitalization of $3.5 billion.
The REIT invests in commercial properties with a retail real estate focus. Still, the company has been diversifying its asset base in recent years, which is why RioCan describes its portfolio as retail-focused and increasingly mixed-use.
Some of the REIT’s headline numbers can be seen here:


Source: Investor Relations
RioCan focuses on large urban markets, where demand for properties is generally higher, and average rents are higher as well. Thanks to urbanization, people are moving into these markets, which is why the longer-term outlook for these properties is positive. More than half of its properties (by square footage) are located in the Greater Toronto Area.
RioCan owns nearly 180 properties, with about 32 million square feet of net leasable area. On top of that, there’s a huge pipeline of high-quality assets that RioCan plans to develop over time, although this will take years.
While retail REITs can be vulnerable to recessions and other macro shocks when they have a focus on (lower-quality) malls where tenants aren’t resilient, RioCan’s focus is different. Many of its tenants are necessity-based, i.e. drug stores, grocers, and so on. These tend to remain resilient during recessions, which is why there is little risk that RioCan’s tenants will default or run into trouble in a big way.
Under its RioCan Living brand, RioCan also offers residential real estate. Like in the commercial portfolio, the focus here is on high-class assets in the largest and fastest-growing markets. While average lease yields in the residential space are lower relative to commercial assets, residential real estate is very resilient; thus, the buildout of this business lessens some of the risk with RioCan.
In addition, rent growth in the residential space is higher than in many other real estate markets; thus, the residential business could allow for an improved organic growth rate in the future.
On February 18th, 2025, RioCan reported fourth-quarter results.
The company reported new leasing spread of 36.7%, boosting the blended leasing spread to 18.7%. Approximately 4.8 million square feet of leases were completed in 2024, with 1.5 million square feet dedicated to new leases. Committed occupancy was a record high 98.0%, while retail in-place occupancy was also a record at 98.7%. Strategic leasing, particularly in grocery and essential uses, resulted in new grocery store leases, further enhancing RioCan’s portfolio.
Financially, RioCan’s FFO per unit for the quarter grew 5.2% year-over-year to $0.34. Net income of $125.6 million compared favorably to a loss of $117.7 million in the same period of 2023. The company’s financial stability remains strong with a payout ratio of 76%, liquidity of $1.7 billion, and unencumbered assets of $8.1 billion.
Looking ahead, RioCan projects FFO per unit to be between $1.89 and $1.92 for 2025, with a payout ratio of ~60%. The company expects moderate Commercial Same Property NOI growth of close to 3.5%.
Growth Prospects
RioCan has grown its funds from operations-per-share at a solid pace in the past and targets 5% to 7% annual FFO-per-share growth in the coming years.
This funds from operations growth was made possible by several contributing factors. First, the company can increase its same-property rents over time:


Source: Investor Presentation
We see that leasing spreads have been in the 5% to 10% range per year in the recent past before surging last year. While leasing spreads will likely not be as high as the level seen over the past few years going forward, it can be expected that RioCan’s high-quality assets and underlying market growth will allow for ongoing solid lease rate growth at existing properties. Growing rents at existing properties allow for positive same-property net operating income growth, an essential driver for the company’s FFO.
Second, RioCan’s development pipeline and asset purchases should increase the company’s cash flows going forward. RioCan targets a payout ratio of 55% to 65% of its funds from operations via dividends, which means that considerable additional cash is retained. That cash can be used to finance the development of new projects, while using it for acquisitions is another possibility. It should be noted that this is a much lower payout ratio than many of the monthly dividend-paying stocks in our coverage universe.
RioCan’s healthy balance sheet also allows the REIT to finance some of its future investments via debt. The company’s capital recycling activity of selling non-core assets also generates cash that can be used to pay for the development of new and attractive properties in RioCan’s pipeline.
Dividend Analysis
RioCan REIT is seen primarily as an income investment like many other REITs. And rightfully so, as the company offers an attractive dividend yield of 7.5%, based on a monthly dividend payout of CAD$0.0965. At the current exchange rate to USD, shares of RioCan REIT are trading at USD$10.95.
With FFO of USD$1.13 for 2025 and projected dividends of USD$0.81, the payout ratio is projected to be 72%. This indicates that the dividend is relatively safe, as that is not a high payout ratio for a REIT, as many peers operate with much higher payout ratios.
When FFO keeps growing per share, even in a tough economic environment, there is little reason to worry about the dividend as coverage improves over time, all else equal.
The strong balance sheet further indicates that there is little reason to worry about a dividend cut. RioCan’s debt to assets stand at only 48%, which is relatively conservative for a REIT.
Final Thoughts
RioCan REIT is one of Canada’s largest and oldest REITs that operates with a retail-focused portfolio but that has been expanding in the mixed-use and residential space in recent years. The REIT offers an attractive dividend yield approaching 8%.
The focus on high-quality assets in large and growing markets means that RioCan’s portfolio is likely positioned well for the long run, as rents should continue to climb over time, as they have done in the past.
With its strong high-quality asset base and a well-covered dividend, monthly-paying RioCan REIT has merit as an income investment at current prices.
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