By Chinedu Okonkwo | Updated: November 2025
Real estate is the oldest wealth-building tool. But in Nigeria, buying land or building a house requires millions. Does that mean the average earner is shut out? No.
Enter REITs (Real Estate Investment Trusts). In 2025, Nigerian REITs are outperforming the stock market, offering a way to earn rental income without being a landlord.
What is a REIT?
Think of a REIT like a mutual fund, but for property. A company pools money from investors (like you), buys commercial properties (malls, offices, hotels), collects rent, and shares the profit (dividends) with you.
Key Benefit: You can sell your shares anytime on the Nigerian Exchange (NGX), unlike selling a physical house which takes months.
Top Performing REITs in Nigeria (2025)
1. Skye Shelter Fund (SFS REIT)
The star performer of 2025. With a Year-to-Date (YTD) return of over 130%, it has crushed inflation.
- Focus: Residential estates and commercial properties.
- Price: ~₦418 per unit (Nov 2025).
2. UPDC REIT
Backed by UAC Property Development Company. They own prime assets like Victoria Mall Plaza.
- Yield: Consistent dividend payer (approx. 7-8% yield).
- Price: ~₦6.60 per unit. Very affordable for beginners.
3. Union Homes REIT
Focuses on mortgage financing and residential properties.
How to Invest
- Open a CSCS Account: You need a stockbroker (e.g., Meristem, Chapel Hill, Stanbic IBTC Stockbrokers).
- Fund Your Account: Transfer as little as ₦5,000.
- Place an Order: Search for "SFSREIT" or "UPDCREIT" and buy.
Why Invest in REITs?
- Liquidity: Need cash? Sell your shares in 2 days.
- Diversification: Don't put all your money in savings apps.
- Tax Efficient: In Nigeria, REITs are tax-exempt at the corporate level if they distribute 90% of profits.
Risks & Things to Understand
REITs are investments, not savings. Know the risks:
- Price volatility: the unit price can go up or down.
- Dividend uncertainty: payouts depend on rental income and management decisions.
- Liquidity: you can usually sell on the exchange, but liquidity depends on market activity.
- Management quality: a REIT is only as good as the people managing its assets.
How to Evaluate a REIT (Simple Checklist)
- Assets: what properties does it own (offices, malls, residential)?
- Occupancy: are properties rented consistently?
- Dividend history: does it pay regularly?
- Fees: what management fees reduce your return?
- Strategy: how does it grow (acquisitions, development, rent increases)?
REITs vs Buying Land in Nigeria
REITs: easier to start, smaller capital, more liquidity. Land/property: more control but higher capital and slower sales when you need cash.
How REIT Returns Work (Dividends vs Price Growth)
REITs can reward investors in two ways:
- Dividends: periodic payouts funded by rental income (and sometimes asset sales).
- Price growth: if the REIT improves assets, raises occupancy, or the market re-rates the unit price.
Some REITs pay steady dividends with slow price changes. Others are more volatile. Always check the history and don’t rely on one month’s performance.
Beginner Mistakes to Avoid
- Buying without a plan: decide if you want dividend income, price growth, or both.
- Ignoring liquidity: some units trade less frequently, which can affect how fast you can sell.
- Putting all savings in one REIT: diversify and keep emergency funds separate.
Portfolio Tip (Simple Allocation)
If you’re new, consider starting small and spreading risk. Many investors keep REITs as a portion of their overall portfolio alongside cash, fixed income, and (optionally) stocks. The right mix depends on your risk tolerance and timeline.
FAQ
Can I buy Nigerian REITs as a beginner?
Yes. You typically need a stockbroker/CSCS setup, then you can buy units like other NGX securities. Start with an amount you can hold long-term.
Are REITs safer than buying land?
They are different. REITs are more liquid and require less capital, but market prices move. Land can appreciate strongly but can be harder to sell quickly and may have title risks.
How to Research REITs (Quick Due Diligence)
Before you buy, spend 30 minutes researching:
- Dividend history and payout consistency
- What assets the REIT owns and occupancy levels
- Management fees and audited reports (where available)
- How actively the units trade (liquidity)
FAQ (More)
How often do REITs pay dividends?
It depends on the REIT’s policy and performance. Some pay periodically, others may pay less consistently. Always check dividend history and don’t assume future payouts will match the past.
Can I lose money with REITs?
Yes. Unit prices can drop and dividends can reduce. REITs are investments, not guaranteed savings. Diversify and invest money you can hold long-term.
What should I check before buying?
Assets owned, occupancy, dividend history, fees, and liquidity. If a REIT is hard to sell quickly, plan to hold it longer.
Quick Start (Beginner-Friendly)
If you’re new, don’t overthink it. Start with a small amount, learn how the buy/sell process works with your broker, and focus on consistency over “timing the market”.
- Buy a small position and track dividends and price movement.
- Read the REIT’s reports when available (assets, occupancy, fees).
- Hold long-term if your goal is income and stability.
Next Step
If you want to explore property-related opportunities, browse Real Estate and Finance. If you run a real estate business, list your company on 9jaDirectory to attract clients.
Taxes & Payouts (Nigeria Basics)
REIT dividends are investment income, and your broker may deduct fees or withholding where applicable. Check your broker statement so you understand what you received net and what was deducted.
Risk Management
- Don’t buy only because the dividend looks high—check history and asset quality.
- Diversify: don’t put all your money in one REIT or one asset class.
- Plan liquidity: if you may need cash soon, avoid positions that trade slowly.
Conclusion
REITs can be a practical way to get real estate exposure with less capital, but results depend on asset quality, fees, and market liquidity. Start small, research, and hold long-term if your goal is income.
