Q2 REIT Preview: Valuations Rising as Accelerating AFFO Growth Comes Into Focus

Research evidence excerpt

Q2 REIT Preview: Valuations Rising as Accelerating AFFO Growth Comes Into Focus

Global Research INDUSTRY UPDATE

July 14, 2026 Q2 REIT Preview: Valuations Rising as Accelerating AFFO

■Real Estate

■Real Estate/REITs Growth Comes Into Focus

Sam Damiani, CFA^ THE TD COWEN INSIGHT

416 983 9640 YTD sector returns are already near our 15%+ full-year view, supported by improved leasing fundamentals and transaction

sam.damiani@tdsecurities.com markets – most notably in Retail. REIT valuations have tightened on a yield-spread basis but remain reasonable on P/NAV.

Jonathan Kelcher, CFA^ With upcoming Q2 reporting, we look for favourable results and mgmt. commentaries to sustain the valuation and growth

416 307 9931 momentum across most property types.

jonathan.kelcher@tdsecurities.com

Our AFFO growth outlook for Q2 and beyond: Wide y/y AFFO growth disparity continues in Q2E with sectors ranging -56%Golden Nguyen-Halfyard^

416 308 3842 (Office) to +23% (Seniors), with the average being nil. We expect muted y/y AFFO growth for our overall coverage through

golden.nguyenhalfyard@tdsecurities.com Q4/26 but then sharply accelerating to HSD by Q4/27 (MSD average for 2027). By sector, in our order of preference:

Linda Wang^ Retail seen at +1% for Q2E (range -7% to +8%). We expect steadily accelerating growth to a sustainable 5% pace by early

416 983 9259 2027. Our Industrial forecast has +4% for Q2E, growing to 8% in 2027, with the 2028 pace dependent upon market rents

linda.wang@tdsecurities.com and debt refinancing assumptions. We expect continued sector leading growth in the Seniors at +23% led by EXE at +48%,

with CSH & SIA averaging +13% in Q2. AFFO growth is expected to stabilize in the low double-digit range for 2027 and likely

beyond.