Michelle Wearing

Good time to buy in to real estate? Yes, it's one of the most compelling choices today. Combination of low interest rates, low inflation, low growth, and growing demand for tax-efficient income. In 2020, a number of distributions have been reduced, while many in the real estate sector have increased theirs. But you have to be selective.

Cloud over office and retail REITs? Retail was struggling before Covid, and the pandemic just accelerated that. Especially those who didn't have a superior e-commerce presence. Going into the holiday season, lockdowns will be challenging on the bricks and mortar retail locations. Vaccine is a light at the end of the tunnel, but she's still really cautious on retail. Structural challenges remain with over supply. There will continue to be a need for some office space, but flexibility is needed, and how does that translate into office requirements? Next two years will be net negative returns.

Likes it. Stock's performed really well. Q3 results strong. Trading at a 5% discount to NAV. Still upside. Primarily in GTA, Hamilton, Ottawa, Montreal. Buy underperformers and renovate them to the advantage of shareholders. Strong recurring free cashflow, growing distribution. Yield is 2.3%.

Properties in NA and Europe. Trend to e-commerce. Performed very well. Collection is over 99%. Stock's going sideways due to recently raising equity and the value trade. Strong outlook over next 12 months. Great balance sheet. Just increased distribution. Yield is 3.9%.

A play on Quebec. Announced a strategic review, so potential for some sort of activity. She prefers to own a pure industrial. Summit, for example, has Montreal exposure. Retail is going to face significant challenges to creating a path to growth. Third distribution cut since 2017. Better opportunities elsewhere.

Still down over the year, and will be subject to tax-loss selling. Near-term headwinds of its closed malls. Take profits and move on to something with less volatility and less impacted by Covid.

Top-tier malls, but she's concerned over the next few years. Sales falling, rents coming down. Stock falling well before Covid. We're not going to get to the new normal anytime soon. Prefers REITs benefiting from secular trends like data centres, towers, industrials.

A bet on Canadian Tire over the next 10 years. Doesn't see significant amount of growth. Like a bond proxy. Safe play, but there are better opportunities.

(A Top Pick Oct 31/19, Up 15%) Global leader in logistics real estate. Largest industrial REIT play you can get. She'd buy on any weakness. Accelerating demand for e-commerce is generating more need for industrial space.

(A Top Pick Oct 31/19, Down 6%) Recently trimmed position. Still sees upside. Collections are resilient. Very attractive price, 15% discount to NAV. Yield over 3.5%.

(A Top Pick Oct 31/19, Down 9%) Disappointing. Buying on weakness. Only publicly traded Canadian REIT with European residential assets. Rent collections strong, unaffected by pandemic. 20% discount to NAV. Yield is 3%.

Owns hospitals, medical office buildings. Global. Likes the industry. Fair valuation. High leverage. Dividend's flat and barely covered. Earnings volatile. See top picks for her preferred name.

Grocery anchored retail. The sector is OK, but concerned about the retail in the portfolio. She's not overly excited by it. Better secular growth trends like data centres, industrials, and towers.

Sees a bit of softness coming for seniors housing. Covid has elevated expenses. Operating margins pressured in an already tight sector. People are delaying opportunities to put loved ones into a home. Oversupply, which will take 2-3 years to fill up. Sell, and re-enter when we see what the new normal will be.