The emergence of REITs in Ghana

Pacific Rim Real Estae Society
Publication Type:
Conference Proceeding
28th Annual Pacific Rim Real Estate Society Conference, 2022
Issue Date:
Full metadata record
Real estate investment trusts (REITs) are evolving in Ghana’s real estate market. As at mid-2021, Republic Bank and GCB Securities were the two publicly known institutions operating REITs in the country. With the passage of the 2019 REIT guidelines, all existing REITs were rendered invalid, pursuant to provisions that, REITs must be approved by the Securities and Exchange Commission of Ghana. Using exploratory qualitative methods, the study investigates on-going developments surrounding the formulation of REITs in Ghana. Interviews were conducted with institutional investors and policy experts on their perception on the new REIT guidelines and the conditionalities needed for developing a REIT sector in Ghana. Institutional investors were largely receptive of the new REIT guidelines but at the same time not enthusiastic about venturing into it. They exclaimed that, unless REIT yields are proven to be competitive against their existing assets, they may not consider it in the short term. To develop Ghana’s first REIT sector, there are three conditions to be met, namely, creating a conducive macroeconomic environment, improving the state of the real estate industry, and developing an effective legal and regulatory framework. The study concludes that, there is a market for REITs in Ghana to serve institutional investors such as pension funds, insurance companies, private equity funds etc. However, the right structures must be created to usher in more advanced forms of indirect real estate investments. Additionally, real estate companies must be encouraged to trade publicly on the Ghana Stock Exchange once the opportunity presents itself, to expand their financing options. The implementation of the REIT guideline is a major milestone towards negotiating, establishing, and operating REITs in Ghana.
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