Nigeria’s $230m REIT Market Highlights Huge Gap With Africa’s $27bn South African Leader

Nigeria’s REIT market trails South Africa

Nigeria's real estate investment trust market is valued at about $230 million, placing it significantly behind South Africa's more than $27 billion market and highlighting the considerable scope for deeper institutional investment in Nigerian real estate.

The comparison comes as Africa's overall REIT market reaches an estimated $30 billion across 49 operational REITs, with listed REITs accounting for about $21 billion in market capitalisation.

/ You Might Also Like /

South Africa Dominates Africa’s REIT Market

South Africa accounts for more than 90% of Africa's estimated REIT market value, with its market exceeding $27 billion.

Morocco follows with approximately $700 million, while Kenya's REIT market is valued at about $250 million. Nigeria ranks next at approximately $230 million.

The concentration reflects the more developed nature of South Africa's capital markets and its longer-established property investment ecosystem.

The wider African market has nevertheless expanded considerably. The continent now has 49 operational REITs, representing a 56% increase since 2013. Retail, office, industrial and residential properties account for about 89% of the market.

Nigeria’s REIT Market Remains Relatively Small

Nigeria's approximately $230 million REIT market represents only a small fraction of the continent's overall property investment trust market.

That does not necessarily reflect the size of Nigeria's underlying real estate market. Rather, it highlights the relatively limited extent to which institutional capital has been channelled through listed and structured real estate investment vehicles.

Nigeria's REIT framework has been in place since 2008, but the sector remains considerably smaller than South Africa's established market.

The gap therefore presents a potential opportunity for the development of more sophisticated property investment products capable of connecting institutional and retail capital with income-generating assets.

Institutional Capital Remains Important

The development of REITs can broaden access to property investment by allowing investors to gain exposure to professionally managed real estate without purchasing and managing individual properties.

REIT structures can channel pooled capital into office buildings, retail centres, industrial facilities, residential assets and other income-producing properties.

For Nigeria, greater institutional participation could provide an additional source of long-term capital for the property sector, particularly as developers face high construction costs and constrained access to affordable long-term financing.

Nigeria’s REIT Market Is Becoming More Diverse

Nigeria's property investment market has also expanded beyond the traditional listed REIT structures.

NREIT was listed on the Nigerian Exchange in December 2025, while the MOFI Real Estate Investment Fund has emerged as another major property-focused investment vehicle.

NHM previously reported that Nigerian REITs and infrastructure funds had a combined market capitalisation of approximately ₦497.3 billion across eight tracked instruments as of May 2026.

The market therefore includes both conventional REITs and broader real estate and infrastructure investment structures.

NREIT Expands Its Property Portfolio

The expansion of Nigeria's REIT market has also been supported by new capital mobilisation.

NREIT launched a ₦30.4 billion Series 6 offer in July to fund the acquisition of additional income-generating commercial properties. NHM reported that the fund's broader issuance programme is designed to expand its portfolio of commercial real estate assets.

More recently, NREIT reported pre-tax profit of ₦6.05 billion for the first half of 2026, up 328.17% from ₦1.41 billion in the same period of 2025. Its investment property was valued at ₦187.43 billion at June 2026.

These developments illustrate how individual Nigerian property investment vehicles are growing even though the country's overall REIT market remains small by continental standards.

Capital-Market Conditions Still Matter

One of the major challenges for Nigerian REITs is competition from other investment opportunities.

High yields on government and central-bank securities can make fixed-income instruments attractive to institutional investors, potentially limiting the amount of capital flowing into property-backed securities.

Nairametrics recently highlighted this competition between REITs and OMO bills, noting that high fixed-income yields have created a different investment calculation for property funds.

For Nigerian REITs to expand significantly, investors will therefore consider not only property fundamentals but also distribution yields, liquidity, capital appreciation and the relative attractiveness of alternative asset classes.

Regulation and Liquidity Remain Key Growth Factors

The broader African experience suggests that REIT growth depends on more than the availability of property assets.

The Fortren & Company report identified deeper capital markets, stronger regulation, improved liquidity and greater institutional participation as important conditions for further expansion of Africa's REIT industry.

These factors are particularly relevant for Nigeria, where increasing the number and scale of property investment vehicles will require sufficient investor confidence and a secondary market capable of supporting transactions.

Greater liquidity can also make REIT units more attractive to investors who want property exposure without the lengthy transaction process associated with physical real estate.

What a Larger REIT Market Could Mean for Housing

The most immediate opportunity for REITs lies in commercial and income-generating property, but a deeper property investment market could have wider implications for housing.

Institutional capital can support the development and acquisition of residential rental properties, student accommodation, mixed-use developments and other income-generating housing assets.

REIT structures could therefore complement conventional mortgage finance and developer lending by providing another mechanism for mobilising long-term capital into the built environment.

However, a larger REIT market would not automatically resolve Nigeria's housing affordability challenge. Land costs, construction expenses, infrastructure deficits, household incomes and mortgage accessibility would continue to influence housing delivery.

The Gap With South Africa Shows the Scale of Opportunity

The contrast between Nigeria's approximately $230 million REIT market and South Africa's more than $27 billion market is significant.

It demonstrates that Nigeria's real estate sector has considerable room to develop deeper institutional investment channels, provided the market can improve liquidity, governance, investor participation and the availability of investable property assets.

For developers, a deeper REIT market could provide another route to capital. For investors, it could broaden access to professionally managed property portfolios. For the wider economy, it could increase the amount of institutional capital available for real estate development.

Outlook

Africa's REIT market has grown to an estimated $30 billion, but its development remains heavily concentrated in South Africa. Nigeria's approximately $230 million market represents a small share of the continental sector despite the country's large property market and significant housing and infrastructure requirements.

The gap highlights both the structural challenges facing Nigeria's property investment market and the potential for expansion.

For Nigeria, the next stage of REIT development will depend on whether new investment vehicles can attract institutional capital, maintain sufficient liquidity and build portfolios of quality income-generating assets.

READ MORE