N1.58bn Rental Income Puts UPDC REIT’s 109% Rally under Spotlight

UPDC Real Estate Investment Trust’s rental income rose 88 per cent to N1.58bn in the first half of 2026, strengthening the earnings story behind a 109.42 per cent year-to-date rally in its units on the Nigerian Exchange.

Rental income increased from N837.1m in the corresponding period of 2025, while total revenue rose to N2.20bn. Net assets attributable to unitholders stood at N36.32bn.

The performance comes as investors have sharply repriced the listed property trust, with its unit price rising to N14.45 by July 28, from N6.90 at the start of the year.

The rally, however, has moved faster than the growth in distributions, putting greater focus on whether the trust can sustain its earnings improvement.

UPDC REIT has proposed an interim distribution of N0.40 per unit for the six months ended June 2026, up from N0.22 paid for the corresponding period last year.

The distribution represents an increase of about 82 per cent and will be paid to qualifying unitholders on September 4, following a qualification date of August 28.

At the current unit price, however, the N0.40 payout represents an interim yield of about 2.8 per cent.

The sharp rally has also pushed UPDC REIT into a premium valuation.

Based on net assets of N36.32bn and roughly 2.67 billion units outstanding, its estimated net asset value per unit is about N13.60.

At N14.45, the units were therefore trading at roughly a 6 per cent premium to NAV.

That premium increases the pressure on the fund manager to demonstrate that the portfolio can generate sufficient rental growth to support the market’s expectations.

SFS Capital Nigeria Limited, which took over as fund manager in January, has outlined plans to improve the performance of the trust’s properties through capital expenditure and asset optimisation.