Nigeria’s Real Estate Investment Trust (REIT) market remains relatively small compared with the wider African market, with a combined market capitalisation of approximately $230 million.
Across the African markets covered by Fortren & Company, the sector is estimated at about $30 billion, with 49 operational REITs identified across Nigeria, South Africa, Kenya, Morocco, Egypt, Zambia, Zimbabwe, Tanzania and Ghana.
So, why is Nigeria’s share still relatively small, and what could help the market grow?
What Exactly Is a REIT?
A Real Estate Investment Trust allows investors to gain exposure to income-generating real estate without having to directly purchase and manage an entire property.
Instead of buying a building yourself, you invest in a professionally managed property portfolio.
REITs can hold assets such as:
- Office buildings
- Shopping centres
- Industrial properties
- Residential developments
- Other income-generating real estate
According to the report, retail, office, industrial and residential properties account for approximately 89% of Africa’s REIT market.
South Africa Dominates the Market
South Africa accounts for approximately 92% of Africa’s REIT market, with a market value of more than $27 billion.
The report links this position to the country’s developed capital markets, stronger institutional participation, greater liquidity and established regulatory framework.
Other African markets have developed at a different pace, with regulation, investor awareness and capital-market depth influencing REIT growth.
Where Does Nigeria Stand?
Nigeria established its REIT framework in 2008.
The market initially included vehicles such as UPDC REIT, SFS REIT and UHREIT. The launch of Chapel Hill Denham NREIT and the MOFI Real Estate Investment Fund in 2025 increased the number identified in the report to five.
Despite this growth, Nigeria’s combined REIT market capitalisation remains around $230 million.
For a country with a large population, significant housing demand and a substantial real estate market, this represents a relatively small capital-market footprint.
Pension Funds Are Showing More Interest
Institutional investors could play a major role in expanding Nigeria’s REIT market.
Pension funds, insurance companies and asset managers can use REITs to gain real estate exposure, generate income and diversify their portfolios.
The report states that pension fund holdings in Nigerian REITs increased by 168% to $50.9 million by March 2025.
However, broader institutional participation remains an important area for market development.
Why Aren’t REITs Growing Faster?
One challenge is competition from other investment options.
The report notes that Nigerian REIT yields below 8% may appear less attractive to institutional investors when government securities can offer returns of up to 15%.
Liquidity is another issue.
A deeper and more active market can make it easier for investors to buy and sell REIT investments. Limited trading activity, meanwhile, can make the asset class less attractive to large investors.
Regulation and Market Confidence Matter
Fortren & Company identifies several areas that could support the growth of Nigeria’s REIT sector, including:
Stronger regulation: Clearer rules can help create greater market confidence.
Better portfolio management: Efficient management can improve the performance of underlying real estate assets.
Lower financing costs: Cheaper financing can support property acquisition and development.
Investor-friendly tax policies: Tax treatment can influence the attractiveness of REIT investments.
Greater institutional participation: More pension funds, insurers and asset managers could provide deeper pools of long-term capital.
What Could REIT Growth Mean for Nigerian Real Estate?
A deeper REIT market in Nigeria could create a stronger connection between the capital market and the property market.
For investors, REITs provide an alternative way to gain exposure to real estate without directly purchasing and managing individual properties.
For developers and property owners, a more developed REIT ecosystem could provide another potential channel for mobilising long-term capital into income-generating assets.
The opportunity is therefore broader than simply creating more REITs. The market also needs the conditions that encourage investors to participate and remain invested.
Nigeria’s REIT Market Has Room to Expand
The gap between Nigeria’s approximately $230 million REIT market and Africa’s estimated $30 billion sector highlights how much smaller Nigeria’s listed real estate investment market currently is.
The sector has already evolved since the country’s REIT framework was introduced in 2008, and the increase in pension fund holdings shows growing institutional interest.
The next phase of growth will depend on factors such as market liquidity, regulation, financing costs, portfolio performance and investor participation.
As Nigeria’s property market continues to develop, REITs could become an increasingly important bridge between real estate and the capital market.
Final Takeaway
Nigeria has a large and growing real estate market, but its REIT sector remains relatively small.
The question is no longer simply whether REITs can exist in Nigeria. It is whether the market can create the liquidity, confidence, regulation and investment conditions needed for them to operate at greater scale.
For investors watching the Nigerian real estate market, REITs are an area worth keeping on the radar.