Are Canadian REITs overvalued?



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Canadian Real Estate investment trusts are mostly trading at, near or within the range of all time highs. So, the question asks: are they overvalued?

Has the REIT market become overheated? Many Canadian REITs are trading at extremely high Price/Earnings ratios and this is what has prompted us to ask this question.

 

For instance, Calloway investment trust, a Canadian REIT in the TSX, trades at PE near 100, Some others also trade at these lofty heights. With the Canadian Real Estate bubble, potentially unwinding, we have to wonder : will these instruments unwind with it?

Is commercial real estate as overvalued as other Canadian RE?

Many of their payout ratios have exceeded 100% in recent quarters. This is a dangerous game to play even for a REIT.