Nigeria’s $230m REIT Market Gets a Rate-Cut Tailwind as CBN Slashes MPR to 23%

The Central Bank of Nigeria has cut its benchmark Monetary Policy Rate by 350 basis points to 23%, the outcome of its 307th MPC meeting in Abuja on Tuesday. The decision lands days after a new Fortren & Company Africa REIT Report sized Nigeria’s five listed real estate investment trusts at a combined $230 million, a small fraction of an African REIT market estimated at $30 billion. The two stories are connected. The report names high government-securities yields as a key reason Nigerian institutions have stayed away from REITs, and that is exactly the lever the CBN has just pulled.

What the Fortren report found

The report covers nine markets: South Africa, Nigeria, Kenya, Morocco, Egypt, Zambia, Zimbabwe, Tanzania and Ghana. According to Nairametrics’ coverage, it counts 49 operational REITs across these markets, with an estimated total value of $30 billion and a listed market capitalisation of about $21 billion.

Concentration is the headline. South Africa holds more than $27 billion, or roughly 92% of the continental total. Fortren attributes that lead to deeper capital markets, stronger institutional participation, better liquidity and more developed governance frameworks. Morocco is a distant second at about $700 million, followed by Kenya at $250 million and Nigeria at $230 million. Egypt, Zimbabwe, Zambia, Ghana and Tanzania each sit below $200 million.

The nine-market figures update Fortren’s January 2026 overview, which covered four markets and placed South Africa above 95% of an approximately $29 billion market.

Nigeria: five REITs and a yield problem

Nigeria established its REIT framework in 2008, but for most of the period since, the market revolved around three vehicles: UPDC REIT, SFS REIT and UHREIT. The report identifies two additions in 2025, Chapel Hill Denham’s Nigeria REIT and the government-sponsored MOFI Real Estate Investment Fund (MREIF). Nigeria REIT listed on the NGX Main Board on 31 December 2025 at ₦103 per unit, implying a value of ₦163.6 billion. MREIF listed its commercial tranche on the Nigerian Exchange on 11 November 2025. It is a hybrid vehicle that combines real estate investment with mortgage finance, offering home loans at 9.75% over up to 20 years with a 10% minimum equity contribution.

The core obstacle, per the report, is competition from the government. Nigerian REIT yields sit below 8%, while the report says government securities can offer returns of up to 15% a year. Current market data suggests the gap is actually wider: the one-year Treasury bill cleared at 16.62% at the CBN’s 9 September auction. For a pension fund manager, a risk-free return more than double a REIT yield is hard to argue against.

Institutional interest is still growing from a low base. The report cites National Pension Commission data showing pension fund holdings in Nigerian REITs rose 168% to $50.9 million by March 2025, and it floats policy options such as mandatory pension allocations to listed real estate.

Why the CBN cut matters for listed property

Tuesday’s cut is the second of 2026, following a 50-basis-point reduction in February, and the biggest cut since December 2006, when the CBN reduced its rate by 400 basis points. The Standing Deposit Facility now sits at 20%. Headline inflation eased to 15.39% in August. In principle, lower policy rates should pull down fixed-income yields over time, which would narrow the gap between Treasury bills and REIT distributions and make income-producing property relatively more attractive.

Investors should read the fine print. In an explanatory note, the CBN described the move as a “reset” rather than conventional easing, aimed at realigning the official rate with interbank rates that were already trading around 22%. In other words, part of the cut formalises market conditions that already existed, so the effect on Treasury bill yields may be smaller and slower than the 350-basis-point headline suggests. The MPC also flagged renewed food and core inflation pressure in August, along with external risks.

Where the money actually sits

Nigeria’s real estate fund sector is highly concentrated. Official mutual fund records to 24 December 2025 showed combined real estate fund net asset value of ₦483.06 billion, about 6.3% of the ₦7.67 trillion mutual fund industry. Two vehicles dominate this total:

MREIF alone accounted for ₦269.85 billion, or roughly 56% of sector NAV, with a reported 10.2% year-to-date return. Chapel Hill Denham’s Nigeria REIT held ₦163.63 billion, about 34%, with a reported 9.3% yield. UPDC REIT was far smaller at ₦33.10 billion but reported a 38% year-to-date yield. That is a single-year figure, and it should not be read as a repeatable income stream.

Snapshot: Africa’s REIT market by country

Sources: Fortren & Company Africa REIT Report via Nairametrics; Central Bank of Nigeria. Country values are approximate market values as reported.

The risks investors should weigh

Small markets bring specific risks. With only five vehicles and two holding about 90% of sector NAV, Nigeria offers limited diversification, and thin trading can make it hard to exit positions at quoted prices. Wits University real estate finance academic Prof. Kola Akinsomi has pointed to stamp duties and withholding taxes as frictions that discourage institutional participation, and has noted that many institutional-grade properties remain privately held rather than inside listed vehicles.

Offshore investors also face naira currency risk: returns earned in naira can shrink sharply in dollar terms. MREIF’s hybrid mortgage structure means it does not behave like a pure income-property REIT. And the standout returns reported for 2025 are backward-looking, not a guide to what the sector will deliver next.

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