Pearl Hostel, which provides accommodation for undergraduate students of Pan-Atlantic University (PAU), has recorded a current yield of 28.36%, the highest among the five properties held by UPDC Real Estate Investment Trust (UPDC REIT).

This is according to UPDC REIT’s property portfolio disclosure for the period ended September 30, 2026.

Located in Sangotedo, Lekki, the hostel has 125 accommodation units and recorded an occupancy rate of 98% during the reporting period.

Pearl Hostel leads UPDC REIT yields

The figures show a significant difference in the rental yields generated by UPDC REIT’s properties, with Pearl Hostel recording a yield more than twice that of Victoria Mall Plaza 2, which ranked second at 11.54%.

  • Victoria Mall Plaza 2 is an office block with a reported area of 7,454 square metres and was fully occupied during the period.
  • Kingsway Building, a retail property on Lagos Island, recorded a current yield of 9% and an occupancy rate of 77%, the lowest among the five assets.
  • Victoria Mall Plaza 1, a block of flats on Victoria Island with 47 units, generated a current yield of 5.58% and was fully occupied.
  • Abebe Court, a residential property in Ikoyi with 26 units, recorded the lowest yield in the portfolio at 5.39%, despite also maintaining full occupancy.

The REIT’s total net asset value (NAV) stood at N36.20 billion as at September 30, 2026, with the five properties forming its disclosed real estate portfolio.

Nigeria faces one million-bed student housing gap

Pearl Hostel’s performance comes against the backdrop of a significant shortage of formal student accommodation in Nigeria, where the deficit is estimated at more than 1 million beds, according to Fortren & Company’s Africa Student Housing Report.

The report examined the purpose-built student accommodation (PBSA) market in Nigeria, South Africa, Kenya and Ghana, finding that Africa has about 250,000 formal student beds for a student population of approximately 25 million.

  • Nigeria has only about 2,839 completed PBSA beds, despite a development pipeline exceeding 45,000 beds.
  • Less than 9% of Nigerian students are accommodated in formal student housing, while more than 90% depend on informal off-campus accommodation.
  • South Africa accounts for about 91.8% of Africa’s formal student housing stock, while average occupancy across the four markets is approximately 95%.

The report identified limited access to long-term institutional capital, weak public-private partnership frameworks and development risks as constraints on the sector’s expansion.

Nigeria’s REIT market remains relatively small

UPDC REIT operates in a Nigerian real estate investment trust market that remains relatively small compared with other African markets, despite the growing number of listed and unlisted property investment vehicles.

  • A report by Fortren & Company on Africa’s REIT market puts the combined market capitalisation of Nigeria’s five REITs at approximately $230 million.
  • Nigeria’s REIT market has operated since the establishment of the country’s framework in 2008 and was initially dominated by UPDC REIT, SFS REIT and UHREIT.
  • Two additional funds entered the market in 2025: Chapel Hill Denham NREIT and the MOFI Real Estate Investment Fund, a hybrid real estate and mortgage fund established by the Federal Government.
  • The report identifies relatively low REIT yields as a challenge to institutional participation, noting that returns below 8% are often compared with government securities offering yields of up to 15% annually.

Pension fund holdings in Nigerian REITs increased by 168% to $50.9 million as of March 2025, indicating growing institutional exposure to the asset class.

The report identifies stronger institutional participation, including increased pension fund investment, as an important factor that could support the expansion of Nigeria’s REIT market.

South Africa dominates African REIT market

Across Africa, Fortren & Company identifies 49 operational REITs with an estimated market value of $30 billion and a combined listed market capitalisation of approximately $21 billion.

  • South Africa accounts for more than $27 billion in REIT market value, representing about 92% of the continent’s total.
  • Nigeria’s estimated market value of $230 million places it well below the continent’s largest market.
  • Morocco follows South Africa with approximately $700 million in REIT market value.
  • Kenya has an estimated $250 million, while Egypt has $160 million.
  • Zimbabwe accounts for about $130 million, Zambia $80 million, Ghana $40 million and Tanzania $30 million.

Fortren & Company attributes South Africa’s dominance to its deeper capital markets, stronger institutional participation, better liquidity and more developed regulatory and corporate governance frameworks.