Nigeria's real estate sector is currently experiencing significant transformation driven by macroeconomic stabilization, infrastructure development, and asset repricing. According to the 2026 Nigeria Real Estate Market Outlook Report by Panterra, the real estate sector contributed approximately 4.23 percent to Nigeria's GDP in the second quarter of 2025, which underscores its importance in the national economy. However, despite this contribution, institutional investment in the property market remains under 10 percent of the total, indicating substantial opportunities for growth in capital market investments.
The report highlights a substantial housing deficit in Nigeria, estimated at around 28 million units, which reflects a persistent demand for housing that is expected to support long-term property valuations. In this context, listed property funds have gained prominence among investors looking to engage with Nigeria's urbanization and infrastructure development without the complexities associated with direct property ownership. This trend is further reinforced by the fact that these funds are becoming increasingly attractive due to their ability to offer exposure to the evolving real estate landscape.
A pivotal factor influencing real estate returns is the geography of infrastructure rather than traditional growth metrics such as population increase or inflation hedging. The 2026 outlook indicates that investments in transport and urban regeneration are now crucial drivers of rental growth, asset absorption rates, and land values, especially in regions connected to logistics routes and commercial corridors. This shift is evident in the financial performance of listed real estate investment trusts (REITs), which have strategically adjusted their portfolios towards districts poised for growth due to new road networks and mixed-use developments.
For instance, the full-year 2025 financial statements of several listed REITs reveal notable trends. UPDC REIT reported an increase in its investment property portfolio value from N25.5 billion in FY23 to N27.4 billion in FY25. Similarly, UH REIT saw its holdings rise from N9.96 billion to N25.6 billion over the same period, while SFS REIT's portfolio grew from N1.96 billion to N2.02 billion. As these funds diversify their investments toward emerging growth areas, the implications for the broader real estate sector are significant. Financial results from these funds indicate that Nigeria's real estate market is undergoing selective repricing rather than uniform growth, with variances in earnings per share illustrating this trend. For example, SFS REIT experienced a 32.8 percent increase in EPS, while UH REIT's EPS rose by 11.8 percent. Conversely, UPDC REIT faced challenges, with its EPS declining from N1.76 to N0.84, reflecting potential issues such as asset write-downs or occupancy difficulties. Overall, the ongoing infrastructure developments are reshaping the property landscape, providing both challenges and opportunities for listed property funds in Nigeria.