Scotiabank analyst answers: ‘Will senior housing be the top performing REIT sector again in 2026?’

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Real Estate

Scotiabank strategist Himanshu Gupta assessed subsector leadership within the REIT sector,

“When will it be the time to rotate out of Seniors Housing? Seniors Housing sector was once again the best performing real estate asset class in 2025, Can this outperformance repeat in 2026? Short answer is yes. We remain overweight on seniors housing in 2026. See our detailed work inside as we looked at peaks of three darlings in the last real estate cycle i.e. industrial, self-storage and Sunbelt multi-family. We observed that rise in construction starts was not the catalyst to rotate out of the ‘hot’ asset classes. It was only when occupancy peaked and market rents started to roll over i.e. when impact of actual supply happened. For Seniors Housing - we expect construction starts to pick-up in 2026, but new deliveries to be elevated only in late-2028/ 2029 and onwards. With market rent growth outlook at mid-single digit (i.e. no deceleration), we think, we can get another year of outperformance from Seniors Housing. We continue to believe FFO [funds from operations] per unit growth remains an important driver for REIT outperformance. ... In 11 out of the last 18 years, REITs that had the highest forecast FFOPU [funds from operations per unit] growth going into the year delivered the best returns that year – this was the case for 2025 (& 2024 as well) … We forecast Seniors to have the highest FFOPU growth in 2026, similar to 2025”

Mr. Gupta has “sector outperform” ratings on Sienna Senior Living Inc. (SIA-T) and Chartwell Retirement Residences (CSH.UN-T).

Energy

RBC Capital Markets natural gas and gold strategist Christopher Louney provided guidance on natural gas markets amid obnoxious cold weather in the northeast,

“While this mostly weather -driven rally is fundamental in nature, it is also temporary , as weather and freeze -offs are temporary . The sustained impact stems from storage. Demand spikes and production freeze -offs mean high withdrawals are impending in the coming weeks, and thus a lower end of withdrawal season exit number than we previously anticipated is likely, somewhere in the 1.5 -1.7 Tcf range at least, assuming colder -than -average weather persists, with further risks. This aligns with and raises the probability of our published high scenario price this year, tilting the risk towards the higher end of the annual average trading range ($3.49 -4.85/MM Btu) we have been highlighting for the year. While fundamental in nature, weather is temporary, leaving the next few storage withdrawals as the real signal to watch on how much enduring strength we should factor in for 2026”

Metals

In a separate RBC Capital Markets report, analyst Josh Woldson outlines top ideas in the soaring precious metals sector,

“Royalty valuations recently hit 10-year lows, producer valuations are stable. At spot gold prices, our royalty coverage trades at 1.63 times P/NAV, compared to 1.82 times/1.85 times on a 1Y/3Y basis. Our senior producer coverage trades at 1.09 times P/NAV, compared to 1.06 times/1.21 times on a 1Y/ 3Y basis . At spot gold, producers are trading at forward 12-month FCF/EV [free cash flow to enterprise value] yields of 8 . 1% , while royalty companies are trading at 4.8% .

“Notable company valuations ... Discounted: Agnico Eagle, Wheaton Precious Metals. Premium : Barrick Mining, Kinross. Select commentary: RGLD: One of the top performers across our coverage on a 1 and 3 month basis . Shares are now trading at a more typical discount vs . peers, as compared to a significant discount noted in prior publications. WPM : Shares have outperformed peer royalty companies, but also lagged fundamental leverage to sharply rising silver prices . Silver now represents 50 per cent of revenues at spot, and relative valuation partially hinges on the sustainability of current elevated silver prices ... OR: Shares previously sharply de -rated in 4Q, but have started to rebound recently. Similarly, 45 per cent of revenues at spot are contributed by silver, and relative valuation partially hinges on the sustainability of current elevated silver prices ... AEM/KGC: KGC valuation has continued to expand vs . both its typical valuation and vs. peers. KGC now leads the senior producer group valuation, having surpassed AEM . AEM relative valuation continues to screen discounted vs. typical trading ranges ... B: Shares appear more expensive than historical 1-year trading ranges, but in our view B prior valuation is not comparable to today. B performance and valuation has compressed recently vs peers, potentially reflecting upcoming YE update uncertainties”

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Diversion

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