Industrial real estate, data centres, and student housing have emerged as the new focus areas for Real Estate Investment Trusts (REITs) across Africa, according to the Chief Executive Officer of Fortren & Company, Martin Uche.
The comment was made during an appearance on CNBC Africa’s Closing Bell, where he discussed shifting investment patterns in the continent’s property market.
The trend reflects a broader repositioning of capital away from traditional retail and office assets toward higher-growth sectors.
What they are saying
Uche said African REITs are undergoing a structural reallocation of capital, as investors reassess where sustainable income can be generated within the property market.
He added that legacy asset classes are gradually losing appeal compared to newer, higher-growth segments.
- “Historically, retail and office assets dominated African REIT exposure, reflecting the availability of investable-grade stock and familiarity within early-stage capital markets,” he said.
- “The current cycle is different. Industrial real estate, data centres, and student housing are emerging as primary allocation targets.”
He attributed the shift to e-commerce growth, AfCFTA-driven trade expansion, and rising demand for tertiary education.
He added that investors are now prioritising assets with more durable income streams over traditional property classes.
Uche explained that the repositioning represents a “fundamental repricing” of where sustainable demand and rental income are concentrated across the continent’s property ecosystem.
Get up to speed
Africa’s REIT market remains heavily concentrated and unevenly developed, with South Africa accounting for the vast majority of activity. Nigeria, Kenya, Egypt, and Morocco are still in relatively early stages of market maturity.
The structure of REITs allows investors to pool capital into income-generating real estate assets while receiving regular rental distributions.
- The African REIT market is estimated at about $30 billion in total value.
- Over 95% of REIT assets are concentrated in South Africa.
- South Africa’s REIT ecosystem is supported by deep capital markets and strict payout rules.
- Markets such as Nigeria and Kenya remain less liquid with fewer listed vehicles.
Uche noted that while South African REITs have outperformed some global peers, performance across Africa varies significantly due to differences in liquidity, regulation, and market depth.
He also highlighted currency risk as a key consideration for investors, especially in markets with volatile exchange rates such as Nigeria.
More insights
Beyond sectoral shifts, Uche pointed to structural and regional differences shaping REIT performance across Africa, including valuation gaps and differing levels of institutional participation.
He noted that Nigeria’s listed REITs often trade at discounts to net asset value, raising questions about market pricing efficiency and investor confidence.
- Nigeria’s UPDC REIT trades below its net asset value, reflecting market valuation gaps.
- Kenya is exploring dollar-denominated REIT structures to reduce currency risk exposure.
- Morocco benefits from relative currency stability, improving investor confidence.
- Logistics and student housing are emerging as strong growth subsectors across the continent.
He also cited demand pressures in logistics real estate driven by port cities such as Lagos and Durban, alongside persistent shortages in student accommodation, which has boosted performance in specialised REIT structures like Kenya’s Acorn Student Accommodation REIT.
What you should know
Nigeria’s REIT market remains small but is gradually evolving, supported by new listings, institutional interest, and government-backed initiatives aimed at expanding real estate financing.
Despite growth, the sector still represents a small portion of the broader mutual fund industry.
- Key listed REITs in Nigeria include SFS REIT, UPDC REIT, and UH REIT.
- The MOFI Real Estate Investment Fund Series 2 was listed on the Nigerian Exchange Group in November 2025.
- Nigeria’s REIT assets stood at N483.06 billion as of December 2025.
- REITs account for about 6.30% of the N7.67 trillion mutual fund industry.
Experts continue to argue that stronger pension fund participation is critical to unlocking long-term growth in the sector, with regulatory constraints and competing fixed-income yields still limiting capital inflows.
According to real estate finance expert Prof. Kola Akinsomi, structural reforms are needed to deepen participation and improve market liquidity, particularly in comparison to South Africa’s more mature REIT ecosystem.
nice to hear about reits and best investment