Canadian Real Estate Stocks That Could Be Due for a Big 2026

Canadian real estate investment trusts (REITs) are staging a remarkable comeback in early 2026, buoyed by stabilizing interest rates from the Bank of Canada and persistent e-commerce and logistics demand. Investors with a nose for value should load up now on select names trading at discounts to their intrinsic worth, delivering juicy dividend yields and growth prospects.

Dream Industrial REIT

Dream Industrial REIT (TSX:DIR.UN) is your ticket to the industrial revolution underway right now. The company’s high-quality assets near urban centres are tailor-made for e-commerce distribution, with near-shoring trends adding tailwinds across North America and Europe.

This stock trades at a 20% discount to private market value and DCF fair value (at least according to my models). And with a dividend yield of 5.3%, there’s plenty to like about the long-term income component of this REIT. Indeed, I see solid capital appreciation and passive income returns over time, with my base case being double-digit total returns over the long-haul. At the end of the day, that’s what I’m after.

Short-term dips from JV partnerships are fading, paving the way for earnings acceleration as capital gets redeployed. With a reasonable price-earnings multiple and the stock trading below its fair value estimate in my eyes, this is a stock that has a place in a well-diversified portfolio.

With management guiding toward occupancy of more than 95% in its core properties, I think there’s plenty of long-term rental and net income growth ahead. Indeed, Dream Industrial remains one of my top long-term picks in the REIT space for these reasons and more.

Granite REIT

Another top real estate investment trust I’ve begun to get increasingly bullish on is Granite REIT (TSX:GRT.UN).

This pure-play logistics landlord just posted blockbuster 2025 results. Revenue surged to more than $618 million from $569 million in the prior year. Even more impressively, operating income surged to $519.8 million, proof of its mission-critical warehouses leased to investment-grade tenants on long-term, CPI-linked contracts. Additionally, same-property NOI growth clocked mid-single digits despite sector headwinds.

These tailwinds are supported by a pristine balance sheet boasting a debt-to-equity ratio of just 0.5 times and interest coverage of 3.7 times. That makes this stock an ultra-resilient option, even if rates tick up.

Trading at a rock-bottom price-book ratio of 0.7 times, this is an undervalued stock relative to its peers. And given the company’s 15-year dividend growth streak and 3.7% yield, I think the long-term income opportunity here is notable. Those thinking of adding a compounder with long-term total return upside shouldn’t sleep on Granite REIT right now, in my view.

The post Canadian Real Estate Stocks That Could Be Due for a Big 2026 appeared first on The Motley Fool Canada.

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More reading

• 3 TSX Dividend Stocks With Payout Ratios You Can Actually Trust
• These Canadian Dividend Stocks Are Breathtakingly Cheap Right Now
• 3 Top REITs to Buy for March
• 4 Canadian Dividend Stocks to Buy if You Want $500 a Month
• Transform Your TFSA Into a Money-Making Machine With Just $10,000

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Dream Industrial Real Estate Investment Trust and Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.