Nigeria’s pension funds increased their exposure to Real Estate Investment Trusts (REITs), with holdings rising by 168 percent to N69.73 billion by March 2025, from N6.14 billion in the corresponding period of 2024.
The move marks a strategic shift by Pension Fund Administrators (PFAs), who are rebalancing portfolios towards more liquid, income-generating assets amid changing market conditions and long-term inflation concerns.
Agudah Oguche, chief executive officer, Pension Fund Operators Association of Nigeria (PenOp), said between March 2023 and March 2025, pension fund investments REITs and Real Estate Assets demonstrated dynamic shifts, reflecting evolving strategies among PFAs.
Oguche said this represents a 167.7 percent increase from 2023 to 2025, despite the dip in 2024, showing renewed interest and confidence in REITs as a vehicle for diversified, income-generating real estate exposure.
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“On the other hand, direct investments in real estate assets grew consistently from N218.3 billion in 2023 to N281.56 billion in 2024, before slightly easing to N259.08 billion in 2025. This indicates a cumulative growth of 18.7 percent over the two-year period, reflecting sustained PFAs’ preference for real estate as a long-term asset class for portfolio diversification and inflation protection.”
Oguche further stated that together, these figures show that pension funds are strategically balancing between direct real estate and REITs, with REITs gaining renewed momentum in 2025, while real estate investments remain a solid cornerstone in pension portfolios.
“This diversification is crucial for hedging against inflation and delivering stable returns for contributors and retirees alike, Oguche said.
Chika Onwunali, partner at Premium Debate, said the sharp recovery by March 2025 reflects renewed confidence among PFAs in the REIT market’s ability to deliver steady returns and liquidity, particularly in a high-interest-rate environment.
According to him, the shift underscores a broader move by institutional investors to diversify income streams without assuming the operational risks tied to direct real estate ownership.
Onwunali, said, “The steady allocation signals the asset class’ continued role as a hedge against inflation and a long-term portfolio stabiliser. Taken together, the trends indicate a dual-track strategy among pension managers balancing liquidity and yield through REITs, while maintaining core exposure to real estate’s intrinsic value.”
REITs allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets.
Nigerian listed REITs, according to industry data, reported a rental income of N2.26 billion for the fiscal year 2024, driven by rising occupancy rates and sustained demand.
Analysts at Mixta Africa said investing in REITs is a great way to get into the real estate market without having to buy or manage a property yourself.
“They offer both substantial dividend yields and modest long-term capital growth, and their dividends are generated from the rents paid by the tenants of their properties,” Mixta Africa analysts said.
“When you invest in a REIT, you become a part of a larger group of people who own income-producing real estate, which is everyone’s dream.”
