Why South Africa’s 95% Hold on African REITs is a ‘Wake-Up Call’ for Nigeria’s Property Sector
The data is out, and for the Nigerian real estate investment community, the figures are as sobering as they are instructive. Recent market analysis reveals that South Africa currently controls a staggering 95 percent of the African Real Estate Investment Trust (REIT) market, a sector valued at approximately $30 billion.
While the headline figure suggests a continental monopoly, a deeper dive reveals a more nuanced story. For Nigeria, Africa’s largest economy and most populous nation; this dominance is not just a statistic; it is a test of our structural readiness, policy execution, and capital market innovation.
A Tale of Two Realities
The disparity is stark. South Africa’s REIT market is defined by depth and liquidity, with over 30 entities listed on the Johannesburg Stock Exchange (JSE) covering everything from industrial warehouses to retail malls. This maturity underpins their $29 billion market cap.
In contrast, Nigeria’s REIT ecosystem remains in its infancy, hovering around a $600 million valuation with only a handful of listed funds.
The Nigerian Advantage: Latent Demand
With a population of 230 million and a housing deficit reaching into the tens of millions, Nigeria’s real estate fundamentals are arguably stronger than any other on the continent.
Our advantage lies in rapid urbanization and a vibrant rental market that already functions at high velocity—albeit informally. The challenge is that while South Africa’s property market has been successfully "financialized," Nigeria’s property wealth remains locked in "bricks and mortar" rather than liquid, tradable instruments.
MOFI and the Shift Toward Institutional Liquidity
There are signs that the tide is turning. The recent entry of the Ministry of Finance Incorporated (MOFI) Real Estate Fund is a strategic signal that the Federal Government is beginning to view real estate as a core pillar of financial market development.
By listing new tranches of investment units, MOFI is attempting to bridge the gap between state-held assets and private capital. If successful, this could serve as the cornerstone for a new era of institutional participation, moving the needle from speculative land-flipping to sustainable, yield-generating REITs.
The Strategic Levers: How Nigeria Closes the Gap
To challenge the status quo and reclaim its rightful share of the continental market, Nigeria must pull four critical levers:
Deepening Capital Markets: We must move beyond "listing for listing’s sake." The market requires transparency and regulatory frameworks that give both local pension funds and international investors the confidence to commit long-term capital.
The Mortgage Link: A REIT is only as strong as the underlying demand. A robust mortgage finance system is the "missing link" that will unlock residential REITs, allowing them to scale beyond prime commercial properties.
Product Innovation: We cannot simply copy the South African model. Nigeria needs "homegrown" REIT structures—diaspora-targeted funds, affordable housing vehicles, and rental-income-backed instruments that reflect our unique economic reality.
Addressing Opacity: Capital does not fear risk; it fears a lack of clarity. Faster land titling, consistent FX policies, and credible property data are the "soft infrastructure" required to turn buildings into bankable assets.
The 95 percent market share held by South Africa is not a sign of defeat; it is a benchmark. It serves as a mirror held up to Nigeria’s unrealized potential.
Nigeria’s challenge is not only housing defecit, it suffers from a shortage of scalable, investable platforms. The real estate economy in Nigeria is already massive in physical terms; the next chapter is about making it financially legible to the world.
The current imbalance in the African REIT market is a signal flare. The prize for Nigeria is far larger than just "market share", it is about reshaping how our cities expand, how our pension savings are protected, and how ordinary Nigerians can finally participate in property wealth without having to lay a single brick themselves.
