Nigeria’s pension funds elevated their publicity to Actual Property Funding Trusts (REITs), with holdings rising by 168 % to N69.73 billion by March 2025, from N6.14 billion within the corresponding interval of 2024.
The transfer marks a strategic shift by Pension Fund Directors (PFAs), who’re rebalancing portfolios in direction of extra liquid, income-generating belongings amid altering market circumstances and long-term inflation issues.
Agudah Oguche, chief govt officer, Pension Fund Operators Affiliation of Nigeria (PenOp), stated between March 2023 and March 2025, pension fund investments REITs and Actual Property Property demonstrated dynamic shifts, reflecting evolving methods amongst PFAs.
Oguche stated this represents a 167.7 % improve from 2023 to 2025, regardless of the dip in 2024, displaying renewed curiosity and confidence in REITs as a car for diversified, income-generating actual property publicity.
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“However, direct investments in actual property belongings grew constantly from N218.3 billion in 2023 to N281.56 billion in 2024, earlier than barely easing to N259.08 billion in 2025. This means a cumulative progress of 18.7 % over the two-year interval, reflecting sustained PFAs’ desire for actual property as a long-term asset class for portfolio diversification and inflation safety.”
Oguche additional acknowledged that collectively, these figures present that pension funds are strategically balancing between direct actual property and REITs, with REITs gaining renewed momentum in 2025, whereas actual property investments stay a strong cornerstone in pension portfolios.
“This diversification is essential for hedging towards inflation and delivering steady returns for contributors and retirees alike, Oguche stated.
Chika Onwunali, accomplice at Premium Debate, stated the sharp restoration by March 2025 displays renewed confidence amongst PFAs within the REIT market’s capability to ship regular returns and liquidity, significantly in a high-interest-rate surroundings.
Based on him, the shift underscores a broader transfer by institutional traders to diversify revenue streams with out assuming the operational dangers tied to direct actual property possession.
Onwunali, stated, “The regular allocation indicators the asset class’ continued function as a hedge towards inflation and a long-term portfolio stabiliser. Taken collectively, the traits point out a dual-track technique amongst pension managers balancing liquidity and yield via REITs, whereas sustaining core publicity to actual property’s intrinsic worth.”
REITs permit people to spend money on large-scale, income-producing actual property. A REIT is an organization that owns and usually operates income-producing actual property or associated belongings.
Nigerian listed REITs, in keeping with trade information, reported a rental revenue of N2.26 billion for the fiscal 12 months 2024, pushed by rising occupancy charges and sustained demand.
Analysts at Mixta Africa stated investing in REITs is a good way to get into the true property market with out having to purchase or handle a property your self.
“They provide each substantial dividend yields and modest long-term capital progress, and their dividends are generated from the rents paid by the tenants of their properties,” Mixta Africa analysts stated.
“Whenever you spend money on a REIT, you grow to be part of a bigger group of people that personal income-producing actual property, which is everybody’s dream.”
