Wednesday 3rd December 2025
by inAfrika Newsroom
Nigeria real estate has moved from a background concern to a central pillar of the economy. Recent rebased figures show the sector’s market value at about ₦41.3 trillion in 2024, making it the third-largest contributor to GDP after trade and crop production. At the same time, Nigeria still faces a housing deficit of roughly 28 million units, with at least ₦21 trillion required to close the gap. For bank CEOs and investors, this mix of scale and scarcity turns Nigeria real estate into a disciplined, long-term asset class rather than a simple social headache.
The rebasing of GDP changed the conversation. Updated data lifted real estate’s contribution from about ₦10.5 trillion in 2023 to ₦30.7 trillion, and then to roughly ₦41.3 trillion in 2024. This jump pushed the sector ahead of telecoms, construction and even crude petroleum in the national accounts. Consequently, real estate now sits at the centre of debates on growth, jobs and inflation.
Three forces drive this shift. First, rapid urbanisation and a population above 220 million keep demand for housing and commercial space rising. Second, the housing deficit has widened steadily from about 7 million units in 1991 to 28 million in 2023, reflecting decades of under-supply. Third, investors seek inflation hedges and naira-resilient assets, and rental real estate offers one of the few scalable options.
However, the market remains uneven. Prime offices in Lagos and Abuja still struggle with vacancies and dollar-linked leases. By contrast, mid-market housing, community retail and modern warehouses face chronic under-supply. Africa-wide, modern warehouse occupancy hit around 83 percent in H1 2025, with Nigeria consistently listed among the top hubs. This signals strong fundamentals in the logistics and industrial slice of Nigeria real estate.
Investors who treat “Nigeria real estate” as one homogenous market miss the real story. The investable opportunity concentrates in segments where demand is structural and cashflows are repeatable.
Mid-market rental housing sits at the top of that list. The deficit sits mainly in homes priced and rented for mass and lower-middle-income households, not in luxury towers. Therefore, build-to-rent platforms that standardise two- and three-bedroom units near jobs and transport can deliver steady naira income. In practice, industrialised construction and professional management matter more than iconic architecture.
Industrial and logistics real estate is the second key frontier. E-commerce, FMCG, agro-processing and regional trade all need modern sheds with higher clear heights, proper yard space and basic ESG standards. Knight Frank’s Africa Industrial Dashboard notes that occupancy in modern warehouses reached 83 percent in 2025, driven by trade and tech. Nigeria stands out in that report as a top hub, yet Grade A stock in Lagos, Ogun and Abuja still falls short of demand.
The third opportunity lies in neighbourhood retail and social infrastructure. Large malls face pressure from online commerce and cost of capital. However, community centres anchored by supermarkets, clinics, schools and financial services continue to trade well. These assets sit where people actually live and commute, and they generate sticky, needs-based footfall.
Moreover, Nigeria’s REIT market offers a structural exit route. The country’s listed and unlisted REITs together reached about USD 600 million in value in 2024, making it Africa’s second-largest REIT market after South Africa. The market is still small relative to sector size, yet it signals that institutional vehicles can absorb stabilised assets over time.
For banks, Nigeria real estate should shift from ad hoc collateral lending to deliberate product design. Income-producing housing, logistics parks and neighbourhood centres behave like infrastructure: they require heavy upfront capital but generate long-term, inflation-linked cashflows. Therefore, banks need 7–12-year term loans, construction-to-permanent structures, and asset-backed leases, not just three-year bullet facilities.
Credit committees should also use sector-specific scorecards. Location quality, tenant strength, lease terms and sponsor track record should matter more than bare land value. In addition, banks can finance tenants themselves through receivables and inventory lines, which reduces default risk at the asset level and deepens value-chain relationships.
Policymakers hold the keys to friction and predictability. Faster land titling, electronic registries, and consistent planning rules will cut transaction costs. Meanwhile, clear tax treatment for REITs and real-estate funds, with no surprise changes, will encourage more sponsors to move assets into listed or regulated vehicles. The ₦21 trillion funding need for housing cannot be met by the public balance sheet alone; it requires crowding in private capital under stable rules.
Development partners and DFIs can help build platforms instead of one-off projects. Blended finance that backs green mid-market housing, climate-smart industrial parks and formal rental portfolios will crowd in local pensions and insurers. Moreover, technical assistance on governance, energy efficiency and data disclosure will prepare assets for eventual REIT or fund aggregation.
Nigeria real estate will not close a 28-million-unit housing deficit overnight. Yet a sector now worth more than ₦41 trillion already shapes GDP, employment and financial stability. For serious decision-makers, the question is no longer whether to allocate to Nigeria real estate, but how to build disciplined, scalable exposure to the segments that turn structural pressure into predictable income.
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