Nigerian Real Estate Investment Trusts (REITs), including UH REIT, SFS REIT, and UPDC REIT, recorded a rental income of N2.16 billion for 2023. This marks a 12% increase from the N1.93 billion recorded as rental income in 2022.
Real Estate Investment Trusts (REITs) are publicly traded companies designed like mutual funds, which own, manage, or finance income-generating real estate assets. They typically own a range of commercial real estate, including office buildings, shopping malls, apartments, hotels, and warehouses.
Essentially, the trusts utilize pooled capital from numerous investors to acquire and manage income-producing properties and mortgage loans. Typically, there are three types of REITs, equity REITs, mortgage REITs, and hybrid REITS.
Equity REITs focus on buying, holding, and managing commercial and rental properties to earn profits through acquisition and management, sometimes financing these properties.
In contrast, Mortgage REITs invest in real estate mortgages rather than owning or managing properties, with the properties serving as collateral for their loans. Hybrid REITs blend the strategies of both equity and mortgage REITs by investing in both properties and mortgages.
Currently, there are only equity REITs in Nigeria. And during the year, UPDC REIT led in rental income, earning N1.44 billion.
UPDC REIT – N1.44 billion
UPDC REIT created by UPDC in 2013 is managed by Stanbic Asset Management Limited. Currently, the fund manages
- Victoria Mall Plazas 1 and 2 in Victoria Island
- Pearl Hostel within Pan-Atlantic University, Ibeju Lekki
- UAC Commercial Complex, Abuja
- Kingsway Building, Marina, Lagos
- Abebe Court, Ikoyi Lagos
- Project Stack, Lagos
In 2023, UPDC REIT generated N1.44 billion in rental income on its managed properties, up from N1.26 billion in 2022.
Also in 2023, UPDC REIT’s share price appreciated by 115% to close at N6.40. However, the share price has since declined by 37.5% to N4.00 as of May 20, 2024.
SFS REIT – N190 million
SFS REIT is managed by SFS Capital Nigeria Limited, and in 2023, it posted a rental income of N190 million. The trust posted a total income of N395.4 million, as it recorded an interest income of N147.7 million. The REIT’s net income from 2023 was a 70% growth from the N186.6 million net income posted in 2022.
SFS REIT is the smallest REIT in Nigeria. It manages properties across Lagos including:
- A property on Harold Sodipo Crescent, Ikeja GRA
- A property in Victory Park Estate, Lekki
- Properties in Bourdillion Court, Lekki
- Properties in Milverton, Lekki
- Properties in Cromwell Estate, Lekki
- Properties in Maben Estate, Chevron Drive, Lagos
- Properties in Victoria Crest Estate, Lekki
The REIT generated a rental income of N54.8 million from its properties in Milverton, Lekki and N29.7 million from its property in Victory Park Estate, Lekki. SFS REIT also generated N26.6 million in rental income from its properties in Bourdillon Court, Lekki.
SFS REIT appreciated on the NGX by 31.6% in 2023 from N77 to N101.35. As of May 20, 2024, it was still trading at N101.35.
UH REIT – N531.3 million
UH REIT (UH REIT) was listed on the NGX in 2008, and in 2023, the trust recorded a rental income of N531.3 million. As of FYE 2023, the total market value of UH REIT assets was N10.04 billion, up from N9.82 billion as of 2022.
UH REIT receives rent on an array of properties across Lagos and Abuja, including:
- McDonald Court, Block 4-6 McDonald Road, Ikoyi
- Locke Apartments, Lekki
- 9, Mike Akhigbe Way, Abuja
- Plot 3, Block A4, Olusegun Aina Street, Ikoyi
- Savannah Court Estate, Victoria Island
- Amina Court, Apo, Abuja
- 28A, Rumen Property
UHREIT’s share price stayed consistent throughout 2023 at N36.60, and closed trading on May 20, 2024, at N36.60.
What you should know
As people increasingly seek diverse investment opportunities, Real Estate Investment Trusts (REITs) are emerging as a compelling option. With entities like UH REIT, SFS REIT, and UPDC REIT showing significant rental income growth, investors can now gain exposure to the real estate market without the need to directly own property.
These REITs also pay dividends like regular stocks, making them an attractive choice for those looking to enhance their financial portfolios.