Nigeria’s pension industry is making a dramatic pivot in its real estate strategy — pouring ₦77.8 billion into Real Estate Investment Trusts (REITs) in the first half of 2025 (H1’25), a staggering 417.8% jump from ₦15.03 billion in the same period last year.

The latest National Pension Commission (PenCom) portfolio report shows that while REIT investments skyrocketed, direct real estate holdings by Pension Fund Administrators (PFAs) dropped 7.4%, sliding from ₦276.4 billion in H1’24 to ₦255.9 billion in H1’25.

Analysts say the shift reflects lower risk appetite for direct property ownership amid regulatory headaches — including arbitrary revocation of Certificates of Occupancy by state governments and other bureaucratic bottlenecks.

REITs, introduced in Nigeria by the Securities and Exchange Commission (SEC) in 2007 to boost housing sector financing, are now winning over PFAs for their liquidity, professional management, and inflation-hedging benefits.

“REITs pool investors’ funds to buy and manage income properties or mortgage loans,” explained David Adonri, Vice Executive Chairman at Highcap Securities Limited. “They let investors earn rental income without dealing with the hassle of managing properties.”

Ambrose Omordion of Invest Data Consulting adds: “Since REITs are traded on the Nigerian Exchange like stocks, they offer PFAs an easy way to tap into real estate returns while avoiding the risks of direct property development.”

Industry experts believe this trend could reshape the role of pension funds in Nigeria’s property market, providing developers with a steadier source of capital while protecting retirees’ savings from long-term inflation.