Granite REIT: A Steady Hand in the Logistics Gold Rush

The industrial real estate sector is booming, and Granite Real Estate Investment Trust (GRT.UN) stands at the epicenter of this logistics revolution. With a 63.3 million sq ft portfolio spanning North America and Europe—primarily in high-demand e-commerce and supply-chain hubs—Granite is primed to capitalize on a market fueled by rising e-commerce demand and global supply chain resilience.

Distribution Sustainability: 95% Occupancy & Strategic Debt Refinancing

Granite’s 94.8% occupancy rate (as of Q1 2025) underscores the strength of its tenant base, with leases anchored to sectors like e-commerce, manufacturing, and third-party logistics providers. This stability supports its $0.85 monthly distribution—a 2.4% increase from 2024 levels—and the recently announced 3% hike starting December 2024. The payout ratio of 60% (vs. 67% in 2024) leaves ample room for further growth, backed by $91 million in Q1 FFO and a net leverage ratio of 32%—a testament to disciplined balance sheet management.

The $800M Debt Offering: A Masterstroke in Capital Allocation

Granite’s October 2024 $800 million debt offering wasn’t just about refinancing $585 million in near-term liabilities (including a $400M Term Loan due 2025). By extending maturities to 2029–2031 and locking in 3.494%–4.348% fixed rates, the REIT slashed refinancing risks while freeing capital for strategic growth. The cross-currency swap on its Series 8 debentures—converting CAD payments to Euros—further insulated cash flows from FX volatility, a critical move given its European logistics footprint.

Why U.S. Investors Should Take Note

While Granite is a Canadian REIT, its U.S. and European exposure makes it a tax-efficient play for American investors. Unlike U.S. REITs, foreign dividends aren’t subject to 100% dividend characterization, and its dividend yield of ~9.7% (based on recent distributions) trumps most domestic peers.

The Growth Catalysts: Logistics Demand & Scale

• E-commerce tailwinds: 83% of Granite’s portfolio is industrial/logistics space, directly tied to rising demand for last-mile delivery hubs.
• Lease renewals: Q1 2025 saw 10% rental rate spreads on renewed leases, signaling pricing power.
• Debt flexibility: The refinancing leaves $1.46 billion in liquidity, enabling acquisitions or developments in high-growth markets like the U.S. Southeast or German tech corridors.

Final Call: Buy Now—Growth + Income, No Compromises

Granite REIT offers a rare blend: stable income via rock-solid occupancy and distributions, plus capital appreciation as logistics assets appreciate. With its debt locked in at historically low rates and a 3% distribution hike already in motion, this is a can’t-miss opportunity for income-focused investors.

Act now—don’t let this logistics powerhouse leave you behind.