At ₦41.3trn market value, real estate offers investors limitless opportunities

As of 2024, the real estate market in Nigeria was valued at ₦41.3 trillion, making it an irresistible investment destination for investors, especially those with patient capital and a long-term view of the market.

Available statistics show that the sector contributes 5.45 percent to Nigeria’s GDP. In Q3 2024, the sector recorded 46.52 percent nominal growth, which is slightly lower than the US market growth of 51.3 percent Year-on-Year.

‘Dotun Bamigbola, Senior Partner at Bamigbola Consulting, affirmed that this sector offers “massive opportunities even at continental level,” stressing that with a population, estimated at 230 million and housing deficit put at 20-28 million units, investors have a large green field to play in.

At the continental level, Bamigbola noted that Africa’s market potential is projected at US$17.64 trillion by 2025, while the residential segment is valued at US$14.87 trillion, all driven by urbanisation, middle-class growth, and infrastructure.

He hinted on the Nigerian Real Estate Investment Trust (REIT) market which, he said, is valued at $600million, citing the Knight Frank Africa Horizons 2025/26 Report.

The figure highlights the country’s position as one of Africa’s keys, but still emerging REIT markets, trailing South Africa but ahead of several nations where frameworks are still being developed.

The report shows that Nigeria’s REIT industry remains small compared to South Africa, which dominates the continent with a market capitalisation of about $8.5 billion.

South Africa dominates Africa’s REIT landscape, as its market capitalisation is far ahead of Nigeria’s $600 million and Kenya’s $300 million. Ghana, Morocco, and Egypt are still laying legislative groundwork, but have yet to see actual REIT listings.

In Nigeria, returns on REITs have remained discouraging. Investors earn about 7per cent on REITs, far below the 15 percent offered in South Africa and 9 percent in Kenya. This gap reflects both operational inefficiencies and structural bottlenecks holding back the sector’s growth.

So far, only three Nigerian REITs —Union Homes REIT, SFS REIT, and UPDC REIT —have shown some resilience. Together, they recorded a rental income of N2.16 billion in 2023, according to the Knight Frank Report.

UPDC REIT, one of the largest and most diversified, has demonstrated strength and resilience over the years. Odunayo Ojo, the company’s CEO, revealed that its property portfolio spans more than 100 properties, including office towers, shopping centres, residential complexes, and student hostels across Lagos and Abuja.

Its flagship assets include Victoria Mall Plaza in Lagos, the Kingsway Building in Marina, UAC House in Abuja, and a hostel in Pan-Atlantic University, Epe.