Nigeria’s real estate investment trust (REIT) market requires stronger pension fund participation to unlock growth and attract long-term institutional capital.
Prof. Kola Akinsomi, associate professor of real estate finance and investment at the University of the Witwatersrand, made this known during an interview with Fortren and Company.
He noted that without targeted incentives, Nigeria’s REIT market continues to lag behind South Africa, which dominates the continent’s REIT market with about 95% of market capitalization.
What they are saying
Prof. Akinsomi explained that pension funds are the main source of long-term capital for REITs globally, but in Nigeria, a significant portion is allocated to government bonds due to the attractive yields of 15–20%. He added that regulatory hurdles such as stamp duties and withholding taxes discourage institutional participation in the Nigerian REIT market.
- “In South Africa, as long as operators redistribute 75% of their income, they are excluded from paying capital gains tax and income tax. Whereas in markets like Nigeria, a lot of regulations do not favour REIT as they still pay stamp duty and withholding tax, which is to be wiped out.”
- “The government should be enlightened on what is happening in the industry, especially with asset classes that have the ability to improve the economy, which is the function of the professionals closer to the government.”
- “REITs need funding, pension funds need to be incentivized for them to invest in the REITs market.”
Prof. Akinsomi also noted that passive participation by Nigerian REIT operators slows market expansion as many institutional-grade assets remain privately held by individuals, churches, and conglomerates that avoid REIT regulations.
More insights
Prof. Akinsomi said South Africa’s REIT market thrives due to strong financial discipline, high reporting standards, and portfolio agility among operators.
He noted that diversification across different asset classes and international expansion have strengthened investor confidence and market liquidity.
- Leading South African REITs cited include Growth Point, Redefine, Equity Property Fund, and Vukile.
- Growth Point invests in rental, office, industrial spaces, student housing, and healthcare assets.
- Vukile focuses on rural and small shopping malls, while Equity Property Fund invests in industrial and logistics properties benefiting from e-commerce growth after COVID-19.
Prof. Kola Akinsomi suggested Nigerian REIT operators could also diversify into sectors with stable cash flows, such as healthcare facilities, student accommodation, and logistics, to attract institutional investors, according to the interview with Fortren and Company.
What you should know
Nigeria’s REIT market remains relatively small but is gradually gaining traction through institutional participation and government-backed initiatives.
The sector currently has a few listed vehicles and recent policy moves aimed at boosting real estate financing.
- Key listed REITs include SFS REIT, UPDC REIT, and UH REIT.
- In November 2025, the Ministry of Finance Incorporated listed the N1 trillion MOFI Real Estate Investment Fund Series 2 on the Nigerian Exchange Group, offering 1 billion units at N100 each.
- Total REIT assets in Nigeria reached N483.06 billion by December 2025, representing 6.30% of the N7.67 trillion mutual fund industry.
The development highlights the growing but still modest size of Nigeria’s REIT market compared to more mature markets on the continent.
