BARRIERS AND SUCCESS FACTORS TO THE ADOPTION AND IMPLEMENTATION OF REAL ESTATE INVESTMENT TRUSTS (REITS) IN AFRICAN REAL ESTATE MARKETS

Cletus Moobelaa, Nalumino Akakandelwab, Mutale Katyokac, David Manased, Wilfred Matipae, Dingayo Mzyechef, Victor Samwingag and Sambo Zuluh

AfRES from African Real Estate Society (AfRES)

Abstract: The paper investigates the main barriers and success factors to the adoption and implementation of Real Estate Investment Trusts (REITs) in African real estate markets. From their inception in the US more than half a century ago, REITs have seen steady growth across the globe as a distinct label in real estate investment markets Between 1990 and 2021, REITs have grown in both number and market capitalisation from 120 listed REITs in two countries to over 800 in more than 40 countries. Their continued growth has been buoyed by the manifold benefits associated with this investment option, including increased access to the real estate investment markets, improved stock liquidity, steady access to capital, greater opportunities for portfolio diversification and stability, strong record of performance, to name a few. Despite these benefits, the reality is that the REIT regime is predominantly limited to the developed countries, mainly the US and Europe while other countries are still trailing. Africa, in particular, is lagging behind other regions of the world with only a few countries - South Africa, Nigeria, Ghana, Rwanda, Morocco, Tanzania and Kenya - registering considerable success stories. To investigate the main barriers and success factors, the paper is informed by a thematic literature review on REITs in general, and those of African region in particular. The major obstacles revolve around the inertia in legislating REITs, inadequately developed capital markets, and the level of property market maturity. Lessons learnt, particularly from South Africa and Nigeria, offer some insights on overcoming these barriers including the providence of the enabling environment for increased market transparency.

Keywords: Barriers; REITs; Success Factors (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2022-01-01
New Economics Papers: this item is included in nep-afr and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:afr:wpaper:2022-030

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