Long-Term Growth Thesis for CI Global REIT ETF Amid Dividend Stability

Investment decisions in today's shifting market demand a foundation built on resilience and strategic patience. For investors eyeing Canadian real estate investments in 2025, dividend stability serves as that crucial bedrock. The CI Global REIT Private Pool ETF (CGRE.TO) exemplifies this principle, having maintained its monthly payout at $0.0860 for ten consecutive months and delivering a 4.84% trailing twelve-month yield as of November 14th. This unwavering commitment to its distribution, coupled with a 0% payout ratio, signals operational strength and financial discipline within its portfolio. Occupancy rates consistently hover above 95% across the broader Canadian REIT sector, particularly in residential properties, further reinforce this stability. While the ETF's yield currently sits comfortably above the bottom quartile of the Canadian market (1.14%), it remains below the top performers in the Financial Services sector (9.12%), suggesting room for growth if fundamentals improve. Crucially, the persistent underperformance of Canadian REITs against major benchmarks since 2016 positions them as potentially undervalued assets. Should central banks pivot towards lower interest rates – a scenario many economists now anticipate – the fixed-income nature of REIT payouts could make them increasingly attractive relative to bonds, potentially unlocking significant upside as yields decline.

Residential real estate investment trusts currently offer compelling advantages that position them favorably as interest rates begin to decline. Occupancy rates for these properties remain robust, consistently above 95% according to recent metrics, significantly outperforming their office counterparts within the Canadian REIT sector. This resilience is particularly notable given that the broader S&P/TSX Capped REIT Index has struggled to regain pre-pandemic heights and underperformed major benchmarks like the S&P 500 and TSX 60 since 2016. Such strong occupancy translates directly into stable cash flow generation, a critical foundation for income-focused investors navigating a shifting market environment.

This underlying stability creates a clear opportunity for actively managed solutions like CI Global's offerings, which leverage this residential strength while addressing key limitations of passive alternatives. While passive REIT ETFs dominate the landscape – with iShares XRE offering a 3.56% yield and BMO ZRE providing 4.96% – these products deliver broad market exposure without tactical adjustments. CI Global's ETF, yielding 4.84% as of November 2025, taps into this residential advantage while its active approach allows for strategic diversification across property types and geographies. This flexibility becomes crucial as rate cuts potentially unlock further value in the sector, allowing managers to capitalize on opportunities beyond what static index replication can provide. The current environment suggests residential REITs possess meaningful upside potential as the market recalibrates.

Canadian real estate investment trusts currently sit in a compelling valuation zone, presenting clear capital appreciation potential as interest rates begin to soften. For years, rising borrowing costs strangled REIT performance, pushing the S&P/TSX Capped REIT Index significantly below its pre-pandemic peak and causing it to trail major benchmarks like the S&P 500 and TSX 60 since 2016. This prolonged pressure has left the sector materially undervalued. Crucially, the foundation for a recovery is taking shape; declining rates directly ease the financial burden on REITs, improving their core profitability metric, Funds From Operations (FFO), while simultaneously stabilizing, and often improving, occupancy rates across property types. Residential REITs, in particular, have shown resilience with occupancy rates consistently above 95%. The current yield environment further highlights this opportunity. The CI Global REIT Private Pool ETF (CGRE.TO), a representative vehicle, offers a 4.84% yield as of mid-November 2025. While this comfortably exceeds the bottom 25% of yields across the broader Canadian market, it notably lags significantly behind the top 25% average yield within the high-performing Financial Services sector. This substantial yield gap, coupled with the documented underperformance and the clear link between falling rates and improved FFO/occupancy, signals strong potential for both price appreciation and enhanced income as monetary policy pivots.