
CIBC Analyst Unveils Top Picks Amidst Troubling Times for REIT Sector
2025-06-05
Author: Liam
CIBC's REIT Analyst Sees Opportunity Amid Challenges
CIBC analyst Dean Wilkinson believes that the Real Estate Investment Trust (REIT) sector, despite its current struggles, presents a significant value proposition for savvy investors. He notes that the first major merger and acquisition deal of the year has injected some energy into this "arguably ailing" sector.
Market Dynamics and Investment Sentiment
Despite trading at an average discount of 15% to net asset value (NAV)—an enticing threshold historically—the focus for many investors remains on interest rates. Wilkinson warns that recent shifts, particularly a steepening of the yield curve, may diminish the perceived bargain, putting the REIT sector nearer to NAV parity. He anticipates eventual normalization of the yield curve, which bodes well for REIT investments, though the timeline for this improvement has expanded.
Top Picks in the REIT Space
Focusing on specific asset classes, Wilkinson recommends a few standout options: seniors housing with players like Chartwell and Sienna, multi-family units represented by Killam in Canada and BSR and Flagship in the U.S., and 'defensive' retail sectors with Crombie and Choice. Industrial REITs follow in preference, and Wilkinson considers Boardwalk REIT a fundamental long-term holding.
Contrasting Views from Scotiabank and BofA Securities
Meanwhile, Scotiabank's strategist, Hugo Ste-Marie, is taking a bearish stance. He highlights concerns over the near-term risk-reward balance for equities amid a climate of trade uncertainties, suggesting that the S&P/TSX may be due for a correction after its strong recovery.
On the opposite end, BofA Securities' chief quantitative strategist Savita Subramanian has released an updated list of top stock picks for both growth and value investors. Growth favorites include Allstate Corp. and Meta Platforms, while value stocks feature names like Aflac and Eastman Chemical.
Canadian Markets Show Mixed Performance
Adding to the conversation, BMO Chief Economist Brian Belski points out that Canadian stocks underperformed compared to U.S. markets for the first time this year, signaling a shift toward cyclical sectors. He advises that despite the recent challenges, Canada holds relative value amidst an improving growth trajectory.
Conclusion: Strategic Planning Ahead
As markets evolve, these insights from leading strategists highlight the complexity of investment choices in the current landscape. Investors should remain vigilant and consider strategies focusing on growth, dividends, and value to navigate these turbulent times.