Nigeria’s Real Estate Sector Hits ₦41.3 Trillion, Unlocking New Investment Horizons
Nigeria’s Real Estate Market Reaches ₦41.3 Trillion, Highlighting Investment Opportunities
Nigeria’s real estate sector has reached an estimated ₦41.3 trillion market value, reinforcing its position as a key frontier for long-term investment. This growth is driven by rapid urbanisation, a rising population, and persistent housing shortages, creating significant opportunities for investors with strategic vision and patient capital.
Industry data indicate that real estate contributed 5.45% to Nigeria’s GDP in 2024, reflecting a sector that is both resilient and expanding. In the third quarter alone, the market experienced 46.52% nominal growth, aligning with broader global property trends, albeit slightly below the United States’ year-on-year growth of 51.3%.
According to Dotun Bamigbola, Senior Partner at Bamigbola Consulting, Nigeria’s estimated population of 230 million and a housing deficit ranging between 20 and 28 million units provide an extensive investment runway. On a continental scale, Africa’s real estate market is projected to reach US$17.64 trillion by 2025, with residential property alone valued at US$14.87 trillion, driven by the expansion of the middle class and infrastructure development.
Emerging REIT Market Shows Potential
While Nigeria’s Real Estate Investment Trust (REIT) market remains relatively small at approximately $600 million, it demonstrates promise in establishing structured investment vehicles for both local and international investors. By comparison, South Africa’s REIT market stands at $8.5 billion, while Kenya reports $9% average returns on its REIT portfolios.
Bamigbola noted that Nigerian REITs currently yield an average return of 7%, highlighting opportunities for operational improvements and structural enhancements. Several REITs, including Union Homes REIT, SFS REIT, and UPDC REIT, continue to demonstrate resilience, collectively generating ₦2.16 billion in rental income in 2023.
UPDC REIT: A Case Study in Diversification
UPDC REIT exemplifies market diversification, managing over 100 assets spanning commercial, residential, and student accommodation. Key holdings include:
Victoria Mall Plaza, Lagos
Kingsway Building, Marina
UAC House, Abuja
Pan-Atlantic University Hostel, Epe
Analysts assert that these assets, combined with Nigeria’s substantial housing deficit and rising urbanisation, position the sector as one of the most lucrative investment classes in the country.
Investment Outlook
Experts highlight that Nigeria’s real estate sector offers a dual opportunity: addressing the national housing deficit while providing robust, long-term returns for investors. Strategic investment in structured instruments, including REITs, and in high-demand residential and commercial properties, can create a resilient and growth-oriented portfolio.
The convergence of demographic growth, urban expansion, and evolving financial frameworks underscores real estate as a high-potential sector, capable of delivering sustained economic and social benefits.
