SFS Real Estate Investment Trust’s income grew by almost 50 percent in the nine months to September 2026, supported by higher rental and interest earnings and a N100 million gain from property disposals.
However, declining net asset value, shrinking cash reserves and rising operating expenses highlight the pressures behind the trust’s stronger financial performance.
The trust’s unaudited financial statements showed total income rose to N467.31 million from N312.16 million in the corresponding period of 2025, while net income increased 37.3 percent to N347.19 million from N252.88 million.
Earnings per unit also climbed to N17.36 from N12.64, reflecting improved profitability despite higher administrative costs
Improved performance across the trust’s revenue streams drove the income growth. Rental income rose 15 percent to N185.25 million from N161.09 million, while fixed interest income increased to N182.06 million from N151.07 million.
A N100 million profit from the disposal of investment property also contributed to the increase in total income. The gain, which was not recorded in the corresponding period of 2025, accounted for about 21.4 percent of the trust’s income during the period.
Administrative and other expenses, however, rose to N120.12 million from N59.29 million, an increase of 102.6 percent. Fund management fees more than doubled to N71.14 million from N30.18 million, making them the largest component of operating expenses.
Consequently, net income grew more slowly than total income, rising 37.3 percent against the 49.7 percent increase in revenue.
Despite the improvement in earnings, SFS REIT’s balance sheet weakened over the nine-month period.
Net asset value fell 3.4 percent to N6.24 billion at September 30, 2026, from N6.46 billion at the end of December 2025. Net asset value per unit declined to N312.17 from N323.11, while total assets dropped 3 percent to N6.87 billion.
Investment property decreased 6.2 percent to N5.17 billion from N5.51 billion, following the disposal of properties at Bourdillon Court and Milverton Court and the acquisition of a property at Freeman Estate in Ikota, Lagos.
The trust’s investment in securities, in contrast, rose sharply to N1.67 billion from N371.53 million. This indicates a shift in asset allocation towards financial investments as its direct property holdings contracted.
The portfolio comprised nine properties, primarily residential apartments across Lekki and surrounding areas of Lagos. Eight properties recorded full occupancy, while Freeman Estate remained under construction, with its two units yet to be occupied.
The reported rental delinquency rate was 1.6 percent, suggesting that rent collection remained relatively strong across the portfolio.
One of the most notable developments was the sharp reduction in cash reserves. Cash and cash equivalents fell to N18.24 million at September 2026 from N930.98 million at December 2025, representing a decline of approximately 98 percent.
The reduction reflected the trust’s investment activities and distributions to unitholders. During the nine-month period, it invested N1.10 billion in securities, spent N200 million on investment properties and received N660 million from property disposals.
It also paid N566 million in distributions to unitholders, compared with N430 million in the corresponding period of 2025.
The distributions exceeded the N347.19 million net income recorded during the latest period, reducing the revenue reserve to N760.34 million from N979.15 million at the end of 2025.
Nevertheless, cash generated from operating activities improved significantly to N232.11 million from N31.25 million in the corresponding period of 2025, indicating stronger operating cash generation even as investment and financing outflows depleted available cash.
SREIT closed its last trading day on Monday at N418.75 per share on the Nigerian Stock Exchange (NGX). The fund is the 125th most traded stock on the Exchange over the past three months. The company has traded a total volume of 799,666 shares—in 2,068 deals—valued at N362 million over the period.
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Chinwe Michael is a Nigerian business journalist and media professional with over 4 years of experience covering companies, financial markets, banking, fintech, economic policy, financial inclusion, and corporate affairs. She currently leads the Companies & Markets desk at BusinessDay, where she drives coverage of Nigeria’s corporate and capital markets, translates complex financial data into accessible stories, and mentors younger journalists. Prior to that, she was the head of the financial inclusion/fintech desk. With a background in banking and finance and extensive experience in media and communications, Michael has developed expertise in financial journalism, economic analysis, investigative reporting and market intelligence. Her work examines how monetary policy, corporate performance, capital flows, technology, and regulatory decisions affect businesses, investors, and households. She was selected from about 3,000 applicants as one of 20 journalists for Cohort 4 of the MTN Media Innovation Programme, gaining exposure to new approaches to journalism, technology, and media innovation. Her international journalism experience and engagement with professionals across Russia, Dubai, Saudi Arabia, and others in different sectors have further broadened her understanding of global communication and development.
