Africa’s’ Real Estate Investment Trust (REIT) market is valued at about $30 billion, with listed REITs accounting for $21 billion in market capitalisation, according to a new report by Fortren & Company.

The report said further growth would depend on deeper capital markets, stronger regulation, improved liquidity and increased institutional participation, particularly in emerging markets.

The Africa Real Estate Investment Trust (REIT) Report examined the sector in Nigeria, South Africa, Kenya, Morocco, Egypt, Zambia, Zimbabwe, Tanzania and Ghana, covering market performance, demand and supply dynamics, major operators and growth prospects.

It said Africa currently has 49 operational REITs, representing a 56 per cent increase since 2013, while retail, office, industrial and residential properties account for 89 per cent of the market.

South Africa dominates the continent’s REIT market, accounting for about 92 per cent of total value, with an estimated market value of more than $27 billion. The report attributed the country’s dominance to its deep capital markets, strong institutional participation and established regulatory framework.

It said Africa’s first REIT was launched in Ghana in 1995, but the sector remained largely dormant for nearly two decades due to limited market depth, weak regulation, low investor awareness and limited institutional participation.

Activity accelerated after South Africa and Kenya operationalised REIT regulatory frameworks in 2013, paving the way for listed property vehicles on their stock exchanges.

In Nigeria, the REIT market was established in 2008 and has been dominated by UPDC, SFS and UHREIT. The launch of Chapel Hill Denham NREIT and the MOFI Real Estate Investment Fund in 2025 brought the number of REITs in the country to five, with a combined market capitalisation of about $230 million.

The report said demand for REITs was largely institution-led, with pension funds, insurance companies and asset managers seeking stable dividend yields, inflation protection and portfolio diversification.

It noted that pension fund holdings in Nigerian REITs rose by 168 per cent to $50.9 million by March 2025, although institutional participation remains limited outside South Africa.

According to the report, REIT yields below eight per cent in Nigeria are often considered less attractive than government securities offering returns of up to 15 per cent, limiting institutional demand.

It recommended policy measures, including stronger regulation, improved portfolio management and operational efficiency, to deepen institutional participation and improve risk-adjusted returns.

The report also said high-net-worth individuals remain important investors in frontier markets such as Kenya, Nigeria and Zimbabwe, where institutional participation is relatively weak.

On the outlook, Fortren said South Africa would remain the continent’s dominant REIT market, supported by mature capital markets, strong pension fund participation and diversified property portfolios.

It said smaller markets, including Nigeria and Kenya, were likely to experience gradual growth, with lower financing costs, investor-friendly tax policies, stronger institutional confidence and deeper capital-market liquidity critical to making REITs scalable investment vehicles rather than niche products.