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Retail and office landlord Morguard REIT is cutting its distribution in half for the second time since the pandemic erupted, citing COVID-19′s “significant” impact to its operations.

The real estate investment trust was one of the first in Canada to cut its payout last spring when the economy shut down. Over the nine months since, many larger rivals have followed suit, including RioCan REIT, First Capital REIT and H&R REIT.

Morguard is the first to repeat the move, this time cutting its annual payout to 24 cents per unit from 48 cents.

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“The impact of COVID-19 on Morguard REIT’s operations has been significant and is still evolving,” management said in a statement. “Multiple mandated closures of various businesses across the country have impacted the trust’s collections, operations and leasing programs.”

The REIT is heavily exposed to malls and the Calgary office market, both of which are among the hardest-hit sectors of Canada’s commercial real estate market. Morguard’s units are down 52 per cent from their level before markets dropped last February, and despite the previous distribution cut were still yielding 8 per cent annually.

The future of the office market remains uncertain, but there is hope that it will rebound once COVID-19 vaccines are widely distributed. Office landlord Allied Properties REIT, for one, recently raised its distribution.

But many enclosed malls were already struggling before the pandemic hit, and the second wave of economic shutdowns has hurt rent collections. Morguard collected 84 per cent of its mall rents in November, but that is expected to fall to 71 per cent this month, the REIT said in a statement.

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