Africa’s $30 Billion REIT Market Takes Shape as South Africa Dominates and Nigeria Emerges as the Next Growth Frontier

Africa’s Real Estate Investment Trust (REIT) market is entering a pivotal phase. Long overshadowed by traditional property ownership models and underdeveloped capital markets, REITs across the continent are now gaining momentum—driven by structural housing deficits, rising urbanisation, and renewed investor appetite for inflation-resistant income assets.

A new report titled “Insider Look at Africa’s $30 Billion REIT Market”, compiled by Fortren and Company, shows that while Africa’s REIT ecosystem is still heavily concentrated, momentum is building in select markets. At the centre of this story is South Africa, which controls more than 95% of the continent’s REIT market value, followed—at a distance—by emerging players such as Nigeria, Kenya, and Morocco.

The data reveals not only how uneven Africa’s REIT landscape remains, but also where the next wave of growth is likely to come from.

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South Africa’s Near-Total Dominance

South Africa stands alone as Africa’s most mature REIT market. According to the Fortren report, the country accounts for an estimated $29 billion of Africa’s $30 billion REIT market capitalisation—comfortably over 95% of the total.

This dominance is not accidental. South Africa introduced REIT legislation earlier than most African peers, developed deep and liquid capital markets, and cultivated a strong base of institutional investors, including pension funds and insurance companies.

South African REITs benefit from:

• Clear and enforceable regulatory frameworks
• Transparent property valuation standards
• Regular disclosures aligned with global best practice
• A long-established culture of listed property investment

As a result, South African REITs have become staples in both domestic and international portfolios, offering exposure to retail, office, industrial, logistics, and increasingly specialised property segments.

Performance Fuels Investor Confidence

The Fortren report notes that Africa’s REIT sector underwent a major re-rating in 2024 and 2025, driven primarily by South African listed property companies.

By late 2025, the African REIT Index delivered a staggering 46.2% year-to-date total return, far outperforming:

• The U.S. REIT market
• The UK REIT market
• The Global REIT Index, which posted an average gain of just 12%

This performance reflects a combination of:

• Yield compression as interest rates stabilised
• Strong rental income growth
• Defensive positioning amid inflationary pressures
• A shift by institutional investors toward real assets

The result has been renewed global interest in African listed property—particularly in markets where scale, governance, and liquidity are already established.

Nigeria: A Market of Enormous Untapped Potential

If South Africa represents maturity, Nigeria represents possibility.

Despite accounting for just $600 million in REIT market capitalization as of 2024, Nigeria’s fundamentals position it as one of Africa’s most compelling growth stories in listed real estate.

With an estimated population of 230 million, Nigeria faces:

• A housing deficit of roughly 28 million units
• Rapid urbanisation in cities such as Lagos, Abuja, and Port Harcourt
• A highly active rental market, particularly in the residential segment

These factors create what analysts describe as “low-hanging fruit” for both domestic and foreign investors—if capital market structures can be scaled effectively.

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Why Nigeria’s Rental Market Matters

Unlike many African markets where homeownership dominates, Nigeria has a deep, resilient rental culture. Rising property prices, limited mortgage penetration, and high construction costs have made renting the default option for millions of households.

This dynamic creates ideal conditions for residential REITs, which:

• Generate predictable rental income
• Offer inflation-linked cash flows
• Provide diversification away from government securities

In a country where Treasury Bill yields have been volatile and, in real terms, often negative, income-generating property assets are becoming increasingly attractive.

Government Intervention Signals a Turning Point

A major catalyst for Nigeria’s REIT market came in November 2025, when the government-backed Ministry of Finance Incorporated (MOFI) incorporated the Series 2 Real Estate Investment Fund.

The fund listed one billion units at $0.07 each, injecting millions of dollars in liquidity into the market. The move was widely interpreted as a strategic signal that the Nigerian government intends to institutionalise real estate finance as part of its broader housing and capital markets agenda.

MOFI’s intervention is designed to:

• Provide mortgage liquidity
• De-risk residential real estate investments
• Support the growth of other residential REITs
• Attract institutional capital

For a market long constrained by fragmented property ownership and limited long-term financing, this represents a structural shift rather than a short-term stimulus.

Performance of Nigeria’s Flagship Funds

Following its listing, the MOFI-backed fund traded at $0.29, demonstrating resilience throughout 2025 despite macroeconomic volatility. Its portfolio—focused on prime residential and commercial rentals in Lagos—proved largely inflation-resistant, a key attribute in Nigeria’s high-inflation environment.

According to Martin Uche, Director of Research and Advisory at Fortren and Company, the fund—often referenced by analysts as SFS—is well positioned to lead the market in capital appreciation in 2026.

His outlook is based on a clear trend: institutional investors are increasingly reallocating capital away from declining Treasury Bill yields toward real assets, including listed property.

UPDC REIT: A Long-Term Value Play

Another standout in Nigeria’s REIT space is UPDC REIT, which the Fortren report identifies as a long-term value opportunity.

Currently trading at around $0.01, UPDC REIT is considered deeply undervalued relative to its Net Asset Value (NAV). While liquidity and investor awareness remain limited, analysts argue that improved sector sentiment and policy support could unlock significant upside over the medium term.

Such valuation gaps are typical of early-stage REIT markets—and often represent the entry points that deliver the strongest long-term returns.

Kenya and Morocco: Smaller but Strategic Players

Beyond South Africa and Nigeria, Kenya and Morocco remain part of Africa’s REIT conversation, though their markets are still relatively small.

Kenya has made regulatory progress over the past decade, with REIT frameworks designed to attract both development and income-focused property vehicles. However, uptake has been slower than anticipated, constrained by:

• Market liquidity challenges
• Investor education gaps
• Competition from government securities

Morocco, by contrast, has leveraged stronger links with European capital markets to develop a niche REIT segment, particularly in commercial and logistics assets.

While neither market currently rivals Nigeria in scale potential, both play important roles in diversifying Africa’s REIT ecosystem.

Historical Context: Why REITs Lagged in Africa

For much of the past two decades, REIT adoption in Africa lagged behind other emerging markets. Several structural factors contributed to this:

• Weak land registries and title systems
• Informal property markets
• Limited long-term capital
• Regulatory uncertainty
• Preference for direct property ownership

South Africa overcame these barriers earlier than most, while other countries are only now building the institutional foundations required for REIT growth.

The recent re-rating of African REITs suggests that these structural constraints are beginning to ease—at least in select markets.

Why This Matters: The Bigger Picture

The rise of Africa’s REIT market carries implications far beyond stock exchange performance.

1. Housing Finance Solutions

REITs provide scalable capital for housing development without overburdening government balance sheets.

2. Institutionalising Real Estate

By moving property into regulated, listed vehicles, REITs improve transparency, governance, and investor protection.

3. Inflation Protection

Rental income and asset revaluation offer natural hedges against inflation—critical in African economies with volatile price levels.

4. Capital Market Deepening

REITs expand investment options for pension funds, insurers, and retail investors, reducing overreliance on government debt.

Comparisons with Global REIT Development

In markets such as the United States, Singapore, and Australia, REITs play a central role in financing commercial and residential property. Their growth followed similar patterns:

1. Early dominance by a single mature market
2. Government-backed anchor vehicles
3. Gradual expansion into residential and specialist assets

Africa appears to be following the same trajectory—albeit at a different pace.

Risks and Constraints Remain

Despite recent gains, Africa’s REIT market still faces challenges:

• Liquidity concentration in South Africa
• Currency risk in emerging markets
• Regulatory inconsistency
• Limited retail participation

In Nigeria, policy continuity and macroeconomic stability will be critical in determining whether current momentum is sustained.

Outlook for 2026 and Beyond

The Fortren report points to 2026 as a pivotal year, particularly for Nigeria. With government-backed liquidity support, declining yields on fixed-income instruments, and growing investor awareness, the conditions are aligning for accelerated REIT growth.

South Africa is expected to retain dominance, but marginal growth rates are likely to be higher in emerging markets—where the base is smaller and structural demand is stronger.

Conclusion: From Concentration to Expansion

Africa’s $30 billion REIT market remains heavily concentrated, but the narrative is shifting. South Africa’s dominance provides stability and scale, while Nigeria’s emergence introduces growth, innovation, and demographic momentum.

As housing deficits widen and institutional capital searches for yield and inflation protection, REITs are increasingly positioned as a cornerstone of Africa’s real estate future.

The next chapter will not be defined by who is biggest but by who scales fastest.

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photo source: Google

By : Elsie Njenga

2nd February,2026