However, REIT, which first surfaced in the Nigerian real estate ecosystem 15 years ago, has struggled to yield the magnitude of impact recorded in other advanced economies.
Another downside commonly attributed to this form of investment is REIT fraud. The SEC recommends that investors should be wary of anyone who tries to sell REITs that aren’t registered with the SEC. While speaking recently at a real estate symposium titled, “Real estate as a tool for economic development,” the Chief Executive of Landmark Africa, Paul Onwuanibe, said REIT had failed to make the desired impact on the Nigerian real estate ecosystem due to certain tax-related deficiencies.
According to her, many of the finer details about REIT in Nigeria, particularly the issue of double taxation, was yet to be ironed out. This, she said, had made most real estate practitioners wary about plunging their assets into the trust. As an investment opportunity, REIT has often been criticised for its lack of capital appreciation potential, and the Afriland boss equally believes that putting one’s income-generating assets in a public pool could end up producing this undesired outcome.