Equity REITs in Nigeria: A Beginner's Guide to Investing (2025)
by Bright Ugochukwu
Last Updated: Apr 15, 2025
Thinking of investing without buying a house? Discover how equity REITs in Nigeria can make you money while you sleep.
Property investing sounds exciting—until you realize it often involves millions of naira, maintenance headaches, and long waits. What if you could still earn from real estate without buying or managing a single building?
That’s where Equity REITs come in.
In this guide, you’ll learn everything you need to know about:
- Equity REITs in Nigeria
- Nigeria’s REIT Market
- Equity REIT Benefits
- Risks & Challenges
- Investing in Equity REITs
- Knowing if It Is Right for You
Whether you’re new to real estate or simply want a hands-free investment option, this is your one-stop resource.
Key Takeaways
- Equity REITs let you invest in real estate without owning property directly.
- They offer passive income through dividends and are listed on NGX.
- REITs are more liquid and accessible than traditional real estate.
- Nigeria has a limited number of REITs, like UPDC REIT & Skye Shelter Fund.
- You must understand key metrics like FFO, Dividend Yield, and NAV before investing.
- Ideal for long-term, passive investors looking for regular income—not short-term speculators.
What Are Equity REITs?
Equity Real Estate Investment Trusts (REITs) are companies that own, operate, or manage income-producing real estate. These can include apartments, office buildings, malls, hotels, and warehouses.
Instead of buying the property yourself, you buy shares in the REIT. Then, you earn a portion of the income the REIT makes from renting out or managing those properties.
How REITs Differ from Traditional Real Estate Investing
Traditional real estate investing requires you to:
- Buy a property
- Manage tenants
- Handle repairs
- Sell at a profit (hopefully)
With REITs in Nigeria, you simply:
- Buy REIT shares on the Nigerian Exchange (NGX)
- Earn dividends quarterly or yearly
- Sell your shares anytime on the stock market
Pro Tip: If you don’t want the hassle of tenants, repairs, or property taxes, Equity REITs are a smart way to earn real estate income without owning a single building.
Equity REITs vs. Mortgage REITs vs. Hybrid REITs
There are three main types of REITs:
- Equity REITs: Own and manage income-producing properties.
- Mortgage REITs: Invest in loans secured by real estate.
- Hybrid REITs: Combines both equity and mortgage strategies.
In Nigeria, Equity REITs are the most common type and are best for long-term passive income.
| REIT Type | What It Invests In | Income Source | Risk Level | Ideal For |
|---|---|---|---|---|
| Equity REIT | Commercial & residential properties | Rental income, appreciation | Moderate | Long-term passive investors |
| Mortgage REIT | Real estate loans & mortgages | Interest from loans | High | Yield-seeking risk takers |
| Hybrid REIT | Mix of property & mortgage assets | Rent + interest income | Varies | Balanced-income seekers |
Table 1: Comparison of REIT Types in Nigeria
The State of Equity REITs in Nigeria
Available Nigerian REITs (e.g., Skye Shelter Fund)
As of 2025, Nigeria has a small but growing REIT market.
Key players include:
- UPDC REIT: Managed by FSDH Asset Management. Focuses on commercial and residential properties.
- Skye Shelter Fund: Managed by Skye Financial Services. It focuses on residential buildings in Abuja and Lagos.
- Union Homes REIT: Focuses on residential real estate development.
These REITs are listed on the Nigerian Exchange (NGX), and shares can be bought just like regular stocks.
| REIT Name | Type | Dividend Frequency | Listed On | Recent Performance* |
|---|---|---|---|---|
| UPDC REIT | Equity REIT | Quarterly | NGX | Moderate growth, stable yield |
| Skye Shelter Fund | Equity REIT | Biannual | NGX | Low volatility, consistent income |
| Union Homes REIT | Equity REIT | Annual | NGX | Slower returns, conservative option |
Table 2: Performance is based on recent dividend history and fund reports
Performance Trends: Dividends, Growth, & Risks
- Dividends: Nigerian REITs typically pay dividends annually. The yield can range between 6% and 15%, depending on the fund’s performance.
- Growth: The REIT market is still in its early stages. Growth has been modest but stable.
- Risks: Inflation, regulatory challenges, and underdeveloped infrastructure can affect performance.
Pro Tip: Always check a REIT’s 3–5 year dividend payout trend before investing. Consistency often beats high but unstable returns.
Benefits of Investing in Nigerian Equity REITs
Passive Income Through Dividends
Equity REITs distribute most of their rental income as dividends. This makes them a reliable source of passive income.
For example, UPDC REIT paid a dividend yield of around 8.2% in 2024.
UPDC REIT Stability and Growth of Payments (2016—2024)
Lower Barrier to Entry vs. Direct Property Ownership
Buying a property in Lagos or Abuja often costs millions. But with REITs, you can start with as little as ₦20,000–₦50,000, depending on the share price in the market.
Liquidity Advantages on the NGX
Unlike physical real estate, REIT shares can be bought or sold easily on the Nigerian Exchange (NGX). That means you can access your funds quickly when needed.
Pro Tip: REITs listed on the NGX pay dividends from 90% of their rental income. This makes them an excellent fit for passive income seekers.
Risks & Challenges of Nigerian REITs
Market Volatility & Regulatory Hurdles
REITs are tied to both the real estate and stock market. So, they may drop in value during market downturns. In addition, regulatory delays from SEC or changes in tax policy can also pose challenges.
Limited REIT Options in Nigeria
Compared to countries like the U.S. or South Africa, Nigeria has very few REITs. This limits your options for diversification within the local market.
How to Invest in Equity REITs in Nigeria
Step 1: Choose a Stockbroker (NGX-approved)
You’ll need an account with a registered stockbroker.
Some of the top NGX-approved brokers include:
- Meristem Securities
- ARM Securities
- Stanbic IBTC
These stock brokers allow you to buy REIT shares directly from their online platforms.
Step 2: Analyze REIT Performance Metrics
Before investing, study the REIT’s financials.
Key things to check include:
Key Metrics: FFO, Dividend Yield, NAV
- FFO (Funds From Operations): This shows the actual cash flow from real estate operations.
- Dividend Yield: Annual dividend / Share price. It helps you measure returns.
- NAV (Net Asset Value): Indicates the actual value of a REIT’s underlying properties.
Pro Tip: Don’t chase high dividend yields. Compare FFO (Funds From Operations) and NAV to understand a REIT’s value.
Step 3: Diversify Your REIT Portfolio
Don’t put all your money into one REIT. Spread it across two or more funds to reduce risk.
Also, consider adding international REITs (listed as ETFs) to gain exposure to other markets.
Are Nigerian Equity REITs Right for You?
Ideal For: Passive Investors, Dividend Seekers
If you want a steady income without becoming a landlord, Equity REITs are perfect. They also suit retirees or working professionals looking for alternative income.
Not Ideal For: Short-term Traders, High-Risk Lovers
REITs are not for quick flips. If you enjoy high-risk, high-reward plays like crypto or forex, this may not be exciting enough for you.
Pro Tip: Equity REITs are best suited for patient investors who want exposure to real estate with less capital and zero maintenance stress.
Final Thoughts: Why 2025 Is a Smart Time to Explore Equity REITs in Nigeria
With rising property costs and growing interest in passive income, Equity REITs offer a more innovative way to invest in real estate. They give you all the benefits of property ownership—minus the stress.
Plus, as more Nigerians become investment-savvy, the REIT market is expected to expand.
Start small. Learn fast. Grow steady.
Want help getting started with Nigerian REITs or other smart real estate investments? Let’s talk.
Frequently Asked Questions
Do REITs pay monthly?
Most Nigerian REITs pay quarterly or biannual dividends, not monthly. However, some global REITs, especially in the U.S., pay dividends monthly. Always check the REIT’s dividend policy before investing.
What is better than REITs?
It depends on your goals. Direct property ownership can offer higher ROI and control but comes with higher risk, capital needs, and management stress.
For hands-off investing, REITs are better. Real estate mutual funds, stocks, or ETFs may outperform REITs over time but usually come with more volatility.
What are the top five REITs?
Globally, as of 2025, the top five REITs by market cap and performance include:
- Prologis Inc. (PLD) – Industrial REIT
- Equinix Inc. (EQIX) – Data Center REIT
- American Tower Corp. (AMT) – Telecom Infrastructure
- Public Storage (PSA) – Storage REIT
- Simon Property Group (SPG) – Retail REIT
In Nigeria, some of the notable REITs include:
- UPDC REIT
- Union Homes REIT
- Skye Shelter Fund
What REIT pays the highest dividend?
Globally, AGNC Investment Corp. (AGNC) and Omega Healthcare Investors (OHI) are known for high dividend yields.
In Nigeria, dividend yields vary, but UPDC REIT and Skye Shelter Fund have historically offered competitive returns, often above fixed deposit rates.
What REITs does Warren Buffett invest in?
As of recent filings, Warren Buffett (via Berkshire Hathaway) has invested in:
- STORE Capital (formerly, before it was taken private)
- Vornado Realty Trust (briefly in past years)
However, Buffett generally prefers direct investments in real estate-related businesses over REITs.
