Real Estate Investment Trust Deed (Nigeria)

A Real Estate Investment Trust Deed in Nigeria transfers an interest in property between the named parties and records the terms of that transfer.

REITs in Nigeria are regulated by the Securities and Exchange Commission (SEC) under the Investment and Securities Act 2007 (ISA 2007) and the SEC Rules on Real Estate Investment Trusts. The SEC issued the first Nigerian REIT registration in 2007, with Union Homes Real Estate Investment Trust becoming the first publicly listed REIT on the Nigerian Exchange Group (NGX) formerly known as the Nigerian Stock Exchange. As of 2024, several REITs are listed on the NGX, including SFS Real Estate Investment Trust, Skye Shelter Fund, and UPDC REIT.

The Trust Deed is the constitutional document of a REIT, equivalent in function to the Articles of Association of a company under the Companies and Allied Matters Act 2020 (CAMA 2020), but creating a trust relationship rather than a corporate entity. The Trust Deed must be approved by the SEC before a REIT can be registered and offer units to investors. The Trustee — typically a CBN-licensed trust company or bank — holds the REIT's assets on behalf of unit holders, while the Fund Manager (an SEC-licensed Fund Management Company) manages the portfolio.

The Investment and Securities Act 2007, Section 102, defines collective investment schemes and imposes mandatory disclosure and governance requirements. SEC Rules 473–482 specifically regulate REITs, requiring minimum asset size, distribution policy (at least 90% of distributable income must be distributed annually), investment restrictions (at least 75% of assets must be in real estate), and ESVARBON-registered annual property valuations.

The trust law framework governing Nigerian REITs draws on the Trustee Investment Act (Cap T22, LFN 2004), the general equitable principles of trust law received into Nigerian law, and the SEC REIT Rules. Trust property is held by the Trustee as legal owner, while beneficial ownership vests in the unit holders proportionate to their units.

The legal framework governing the Real Estate Investment Trust Deed (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Real Estate Investment Trust Deed (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Land Use Act 1978 (Cap. L5, LFN 2004) sets the foundational requirements.

A Real Estate Investment Trust Deed in Nigeria is required whenever promoters wish to establish a formal REIT structure to pool investor capital for real estate investment and must create the foundational legal document before applying to the SEC for registration.

A Real Estate Investment Trust Deed is required when a real estate developer, asset manager, or financial institution wishes to list a REIT on the Nigerian Exchange Group (NGX), allowing retail and institutional investors to participate in real estate returns without directly acquiring property. SEC registration under the Investment and Securities Act 2007 requires the Trust Deed as the primary constitutional document.

A Real Estate Investment Trust Deed is needed when a private (unregistered) REIT is established for institutional investors — such as pension funds regulated by the National Pension Commission (PENCOM) under the Pension Reform Act 2014 — who may invest in closed-end real estate collective investment schemes as permitted under PENCOM's Investment Regulations.

A Real Estate Investment Trust Deed is required when an existing property company wishes to convert its real estate assets into a REIT structure to access listed-market capital, improve liquidity for existing shareholders, and benefit from the tax treatment available to REIT distributions under the Companies Income Tax Act (CITA 2004) and the Finance Act 2021.

A Real Estate Investment Trust Deed is needed when a government-linked entity — such as a state housing corporation or the Federal Housing Authority (FHA) — wishes to establish a REIT to fund social housing development, with the REIT issuing units to institutional investors and using the proceeds to finance affordable housing projects.

A Real Estate Investment Trust Deed is required for any REIT seeking to qualify for the tax exemption on distributions available under the SEC REIT Rules and the Companies Income Tax Act 2004, which requires the trust to distribute at least 90% of distributable income annually to unit holders.

Parties in Nigeria should prepare a Real Estate Investment Trust Deed (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A valid Real Estate Investment Trust Deed in Nigeria must contain the following essential elements under the SEC Rules on REITs and the Investment and Securities Act 2007.

Trust Name and Purpose: The official name of the REIT (including the words 'Real Estate Investment Trust' or 'REIT'), its investment objectives (income generation, capital appreciation, or both), and the categories of real estate assets it may hold (residential, commercial, industrial, or mixed).

Trustee: Full legal name, address, and SEC and CBN regulatory status of the Trustee — typically a trust company or bank licensed to act as trustee under the Trustee Investment Act (Cap T22, LFN 2004). The Trustee's duties include holding title to trust assets, enforcing the Fund Manager's obligations, and protecting unit holders' interests.

Fund Manager: Full legal name, address, and SEC licence number of the Fund Manager — a company registered with the SEC as a Fund Management Company under the Investment and Securities Act 2007. The Fund Manager's duties include investment decisions, property acquisition and disposal, tenant management through appointed ESVARBON-registered property managers, and preparation of periodic reports to unit holders and the SEC.

Unit Structure: The number of units in the REIT, their face value in Nigerian Naira (NGN), the minimum subscription amount, and the rights attached to each unit (voting rights at unit holders' meetings, entitlement to distributions, and rights on winding up).

Distribution Policy: The REIT's obligation to distribute at least 90% of distributable income (net rental income and realised capital gains) to unit holders annually, as required by the SEC REIT Rules. The Trust Deed must define 'distributable income', the distribution record date, and payment mechanics.

Investment Restrictions: The SEC-mandated investment restrictions — minimum 75% of total assets in real estate, maximum 25% in permitted liquid assets (government bonds, treasury bills, or bank deposits), and prohibition on development activities beyond a prescribed percentage of the portfolio.

Valuation: The requirement for annual ESVARBON-registered independent valuation of all real estate assets at Market Value under NIESV Standards, forming the basis for the REIT's net asset value (NAV) calculation and unit pricing.

Regulatory Compliance: Provisions for compliance with SEC reporting requirements — including quarterly reports to unit holders and the SEC, annual audited financial statements under IFRS as adopted by the Financial Reporting Council of Nigeria (FRCN), and compliance with the Nigerian Exchange Group (NGX) Listing Rules where units are listed.

Additional compliance elements for a Real Estate Investment Trust Deed (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.