South Africa’s 95% Dominance of Continental REIT Market Issues Challenge to Nigerian Investors
SFS and MOFI Lead Nigeria’s Push Against SA Dominance
Recent market data reveals a stark disparity in the African Real Estate Investment Trust (REIT) landscape, with South Africa currently controlling over 95 per cent of the continent's total market value. While the total African REIT market is estimated at $30 billion, South Africa’s market capitalisation stands at approximately $29 billion, leaving Nigeria and other emerging markets to compete for the remaining five per cent.
Comparative Market Analysis
The dominance of South Africa is reflected in the depth of its capital market. Currently, over 30 REITs are listed on the Johannesburg Stock Exchange (JSE), spanning diverse asset classes including residential, logistics, industrial, and retail. In contrast, Nigeria’s REIT sector remains in an infant stage with a market capitalisation of approximately $600 million as of 2024.
According to a report by Fortren and Company titled 'Insider Look at Africa's $30 Billion REIT Market', the sector experienced a significant re-rating through 2024 and 2025. By late 2025, the African REIT index delivered a 46.2 per cent year-to-date total return, significantly outperforming global benchmarks in the United States and the United Kingdom, which averaged a 12 per cent increase.
The Nigerian Trajectory: Emerging Opportunities
Despite the current valuation gap, Nigeria is positioning itself for a bullish 2026. The market currently features three primary established entities: SFS REIT, UPDC REIT, and UH REIT. The landscape was recently bolstered by the entry of the Ministry of Finance Incorporated (MOFI) Real Estate Fund (MREIF).
In November 2025, MOFI incorporated the Series 2 Real Estate Investment Fund, listing one billion units at $0.07 each. This state-backed intervention is designed to inject liquidity into the sector and provide much-needed mortgage liquidity to the residential segment. Analysts suggest that the move signals a strategic shift toward institutionalising Nigeria’s real estate assets to bridge the country’s estimated 28 million housing unit deficit.
Institutional Rebalancing and Asset Performance
Market experts highlight SFS REIT as a "blue-chip" performer within the Nigerian context. Trading at $0.29, the fund demonstrated resilience throughout 2025, with its portfolio of prime Lagos residential and commercial rentals proving to be effectively inflation-resistant. Martin Uche, Director of Research and Advisory at Fortren and Company, anticipates that SFS will lead the market in capital appreciation in 2026 as institutional investors shift capital away from declining Treasury Bill yields.
Furthermore, UPDC REIT is identified as a significant long-term value play. Currently trading at $0.01, the asset is considered undervalued relative to its Net Asset Value (NAV). Late 2025 earnings suggest a recovery driven by the optimisation of Grade-A office and retail portfolios.
The emergence of REITs in Nigeria represents a critical shift toward democratising real estate investment. By allowing individual and institutional investors to access high-grade assets without the burden of direct property management, REITs serve as a financial equaliser.
For Nigeria to effectively challenge South Africa’s market share, policymakers and regulators must continue to foster a transparent and liquid environment. With a population of 230 million and an active rental market, the structural fundamentals for growth remain strong. The upcoming fiscal year will be pivotal in determining whether Nigeria can translate its demographic advantages into a multi-billion dollar REIT ecosystem.
