UHomes vs UPDC REITFs: Which Nigerian Real Estate Fund Offers Better Value in 2026?

REIT Investment Outlook: UHomes Leads Gains While UPDC Holds Scale Advantage

Nigeria’s listed real estate investment trusts (REITs), UHomes REITF and UPDC REITF, have delivered strong returns into 2026, drawing investor attention to the real estate asset class. According to Nairametrics, UHomes has significantly outperformed UPDC in price appreciation, while both funds maintain solid fundamentals and dividend structures.

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Market Performance and Price Momentum

UHomes REITF has led the market rally, recording a 42% year-to-date (YtD) gain in 2025 and extending that momentum with a 39.83% increase in early 2026. In contrast, UPDC REITF posted a comparatively modest 18.84% gain over the same 2026 period.

This performance divergence highlights stronger investor sentiment toward UHomes, potentially driven by aggressive portfolio revaluation and improved earnings visibility. However, UPDC retains a slightly larger market capitalisation at approximately ₦21.8 billion, compared to UHomes’ ₦18.13 billion.

Understanding REIT Value Proposition

REITs pool investor capital into income-generating real estate assets such as residential developments, commercial properties, and logistics facilities. They distribute a significant share of earnings as dividends, offering investors exposure to real estate without direct ownership.

In Nigeria, the Securities and Exchange Commission reports six REIT-linked mutual funds, which collectively delivered an average return of 19.7% in 2025. This underscores growing investor appetite for yield-driven instruments amid evolving macroeconomic conditions.

Financial Performance and Profitability Trends

Both REITs have demonstrated consistent profitability over the past five years. UHomes reported cumulative profits exceeding ₦20 billion between 2021 and 2025, while UPDC generated approximately ₦13 billion despite a loss recorded in 2021.

In 2025, UHomes’ net income (excluding revaluation gains) rose by 8.5% to ₦1.147 billion. UPDC delivered stronger core growth, with net income increasing by about 30% to ₦2.3 billion.

However, when revaluation gains are included, UHomes’ total income surged to ₦18.218 billion, significantly outpacing UPDC’s ₦4.335 billion, which declined by 7.7% year-on-year.

Earnings Quality and Dividend Yield

Earnings per share (EPS) reflects a sharp divergence. UHomes reported EPS of ₦96.84, compared to UPDC’s ₦1.62, largely driven by property revaluation gains.

Dividend payouts also favour UHomes in nominal terms. The fund proposed ₦1.032 billion in dividends for 2025, translating to ₦4.13 per share. UPDC, by comparison, declared a combined dividend of 55 kobo per unit.

However, the sustainability of UHomes’ higher payouts depends on continued asset revaluation gains rather than purely operational income, raising questions about earnings quality.

Valuation and Investment Considerations

The key distinction between both REITs lies in value versus momentum. UHomes offers stronger price appreciation and higher dividend payouts, but a significant portion of its returns is tied to valuation adjustments.

UPDC, on the other hand, presents a more conservative profile with stronger underlying operating income growth and a larger asset base. This may appeal to long-term investors prioritising stability over short-term gains.

Market data also indicates a divergence between net asset value (NAV)-driven mutual fund returns and exchange-traded REIT performance, reinforcing the importance of valuation discipline in the current rally.

Outlook

The strong performance of both UHomes and UPDC REITFs reflects renewed investor interest in Nigeria’s real estate sector as a yield-generating asset class.

UHomes currently leads on momentum and headline returns, while UPDC offers relative stability and scale. For investors, the choice between both funds depends on risk appetite—whether to prioritise high-growth, revaluation-driven returns or more conservative, income-based performance.

As Nigeria’s REIT market continues to mature, sustained growth will depend on improved asset utilisation, transparency in valuation practices, and broader market depth.

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