Nigeria’s pension fund administrators are rethinking their real estate strategies, with fresh data showing a sharp rebound in investments in Real Estate Investment Trusts (REITs) alongside continued strong interest in direct real estate assets.
Between March 2023 and March 2025, pension fund investment in REITs surged by over 167%, rising from ₦26.04 billion in 2023 to ₦69.73 billion in March 2025. This comeback follows a steep drop to ₦6.41 billion in 2024, a year marked by macroeconomic uncertainty and tighter liquidity across the capital market.
Market analysts say the recovery signals renewed confidence in REITs as a viable asset class for portfolio diversification, driven by their ability to offer regular income and exposure to the real estate sector without the burdens of direct property management.
“REITs are becoming increasingly attractive for PFAs looking to hedge against inflation and generate steady returns in a volatile market,” said a Lagos-based pension analyst. “The 2025 figures show that fund managers are leaning into the liquidity and flexibility that REITs provide.”
Meanwhile, direct investment in real estate continued to play a central role in pension portfolios, growing from ₦218.3 billion in 2023 to ₦281.56 billion in 2024, before easing slightly to ₦259.08 billion in 2025. This two-year growth of 18.7% underscores the long-standing preference of PFAs for tangible real estate assets, which are considered stable and inflation-resistant.
Experts attribute the slight dip in 2025 to a mix of factors, including valuation adjustments, project completion cycles, and the reallocation of capital toward REITs. Yet, real estate remains one of the most resilient asset classes for pension fund managers seeking long-term security for contributors’ savings.
Together, the data illustrates a maturing approach by Nigeria’s PFAs—one that balances traditional real estate exposure with innovative investment vehicles like REITs. This strategy is helping to spread risk, improve liquidity, and respond to the evolving needs of Nigeria’s over 10 million Retirement Savings Account (RSA) holders.
“This shift in allocation shows growing sophistication among Nigerian pension fund managers,” said an investment consultant. “They’re using both REITs and direct property to maximise returns while protecting against economic shocks.”
As Nigeria continues to grapple with high inflation, currency volatility, and a challenging investment climate, the pivot toward a mixed real estate strategy is expected to continue. With total pension assets now well over ₦18 trillion, how these funds are allocated could shape the financial security of millions of retirees in the years ahead.
