The REITs listed on the Nigerian Exchange—SFS REIT, Union Homes REIT, and UPDC REIT—are structured to pool investor funds into income-generating properties such as estates, shopping malls, and office buildings, while paying out most of their earnings as dividends. For investors, they provide a simple entry point into real estate without the complications of direct property ownership.
So far this year, the three trusts have rewarded investors handsomely. Collectively, they have returned an average of 57.47% year-to-date, handily outperforming the broader NGX equity market, which is up 36.72% as of the latest close. SFS has been the clear leader, with its share price surging 68% to ₦301.55. Union Homes REIT followed closely with a 57.4% gain to ₦57.60, while UPDC REIT climbed 47% to ₦7.35.
This performance marks a turnaround from 2024, when SFS surged 77% but its rivals struggled, with Union Homes flat and UPDC posting a 22% decline.
Earnings Show Efficiency Gap
Financial results for the first half of 2025 further underline the gap between scale and efficiency. The three REITs generated a combined ₦2.297 billion in revenue, only marginally higher than the ₦2.253 billion they posted a year earlier.
UPDC, the sector heavyweight by assets, accounted for the bulk with ₦1.537 billion, but this represented a slight year-on-year dip. Union Homes grew its revenue to ₦549 million from ₦493 million, while SFS, the smallest player, lifted its top line to ₦211 million from ₦174 million.
When measured on an earnings-per-unit (EPU) basis, however, SFS stood out with ₦8.32 per unit—well ahead of Union Homes’ ₦2.30 and UPDC’s ₦0.41. The sector average was ₦3.68, showing how far SFS outperforms its peers in squeezing value from a leaner base.
Balance Sheet Reality
In terms of assets, UPDC towers over its peers, holding ₦27.48 billion in investment properties, or more than four-fifths of its ₦33.77 billion total assets. Union Homes reported ₦9.73 billion in investment properties, while SFS carried just ₦1.98 billion out of ₦3.19 billion in total assets.
Collectively, Nigerian REITs hold ₦38.74 billion worth of investment properties, underscoring their relatively modest scale compared with global peers, where individual REITs often command portfolios worth billions of dollars. Yet, it is the smallest player—SFS—that continues to outperform by sweating its assets harder.
Market Valuations and Dividends
Investors appear to have rewarded efficiency over size. On a per-unit earnings basis, SFS leads with ₦25.42, followed by Union Homes at ₦4.24 and UPDC at ₦1.75. SFS also commands a stronger valuation multiple, trading at a price-to-book (P/B) ratio of 2.2x, compared to 1.4x for Union Homes and 0.6x for UPDC.
Dividends add another layer to the picture. The sector average payout stands at ₦8.92 per share, or a yield of 6.3%. Union Homes tops the table at 8.77%, followed closely by SFS at 7.13%. UPDC trails with a yield of 2.99%, reflecting its weaker earnings profile despite its larger balance sheet.
Sector Still Nascent
Despite the 2025 rally, Nigeria’s REIT market remains underdeveloped. With total assets under ₦50 billion and a combined market capitalisation of just ₦40.04 billion—equivalent to a mere 0.045% of the NGX’s ₦89.07 trillion total market cap—the sector is still modest and underleveraged by international standards.
What is clear, however, is that SFS REIT has emerged as the efficiency champion, proving that size alone does not guarantee investor returns. As competition intensifies, the spotlight now turns to whether UPDC can translate its vast property base into stronger per-unit earnings, and whether Union Homes can sustain its steady gains.
For investors, the battle for leadership in Nigeria’s REIT space has never been more engaging, with SFS showing that in this market, small can indeed be mighty.