For many Ghanaians, owning commercial property—an office block, a shopping mall, or a warehouse—has always been out of reach. The capital required is too large, the management is too complex, and the risk is too concentrated. Real Estate Investment Trusts (REITs) solve this problem by allowing ordinary investors to pool their money and own a share of large, income-generating properties. This ASJ article explains how REITs work in Ghana, the rules that govern them, and what you need to know before investing.
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What Is a REIT?
A Real Estate Investment Trust (REIT) is a regulated investment vehicle that owns and manages income-generating real estate. Instead of buying a building yourself, you buy units in a REIT. The REIT uses the pooled money from many investors to acquire properties—office buildings, shopping malls, apartments, warehouses—and collects rental income from tenants. That rental income is then distributed to unit holders as dividends .
In simple terms: a REIT is a way to own a piece of large commercial real estate without needing millions of cedis or dealing with tenants, repairs, and maintenance yourself.
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How REITs Work in Ghana
The Regulatory Framework
REITs in Ghana are regulated by the Securities and Exchange Commission (SEC) under the Securities Industry (REITs) Guidelines, 2019 (SEC/GUI/001/01/2019) . This framework sets out the rules for how REITs must be structured, managed, and operated.
Key Requirements to Qualify as a REIT
To qualify as a REIT in Ghana, a company must meet strict criteria :
| Requirement | Threshold |
|---|---|
| Business focus | Investing in income-generating real estate |
| Revenue from rents/mortgage interest | At least 75% |
| Total assets comprising real estate | At least 75% |
| Distributable profit paid to shareholders | At least 80% |
| Listing on an exchange | Within 3 years of becoming a REIT |
| Leverage ratio | Not exceeding 40% of gross asset value |
| Investment in a single property | Not exceeding 40% |
These rules ensure that REITs remain focused on real estate and return most of their profits to investors.
The Structure: Who Does What
A REIT involves several parties, each with a specific role :
The REIT Manager is responsible for managing the fund’s assets. The manager sources, manages, and disposes of real estate assets, ensures regulatory compliance, handles reporting and investor communication, and oversees valuations and distributions .
The Custodian holds legal title to the REIT’s assets on behalf of investors. The custodian must keep the REIT’s assets separate from its own and supervise the manager to ensure compliance .
The Property Manager handles the day-to-day management of the properties—leasing, rent collection, tenant relationships, and maintenance .
The Sponsor contributes assets to the REIT and works with the manager to ensure the properties are ready for the market .
This separation of roles is designed to protect investors. The custodian acts as a check on the manager, ensuring that the REIT’s assets are safe and used properly.
How REITs Make Money for Investors
REITs generate returns for investors in two main ways:
1. Dividend Income
The primary source of returns is rental income from the properties the REIT owns. By law, REITs must distribute at least 80% of their distributable profit to shareholders . This means most of the rental income flows through to investors as dividends.
2. Capital Appreciation
If the value of the REIT’s properties increases over time, the value of your units also rises. This is similar to how property prices appreciate in the open market.
Tax Treatment of REITs in Ghana
One of the most attractive features of REITs in Ghana is their tax treatment.
At the REIT Level
The income of an approved REIT is exempt from corporate income tax in Ghana . This means the REIT does not pay tax on its rental income or capital gains. This exemption allows more money to flow through to investors.
However, REITs may be subject to a Growth and Sustainability Levy (GSL) of 2.5% of accounting profit before tax .
At the Investor Level
Distributions from a REIT to investors are subject to a withholding tax of 8% . This applies to both resident and non-resident investors.
Important distinction: While unit trusts and mutual funds enjoy a tax exemption for investors, REITs do not have the same exemption. The law contains separate provisions for REITs and other collective investment schemes, meaning REIT distributions are taxable even though the REIT itself is exempt .
Examples of REITs in Ghana
Sentinel REIT
Sentinel REIT is described as Ghana’s first licensed REIT. It invests in prime commercial properties, including One Airport Square .
Rangoon REIT
Rangoon REIT invests in high-quality assets in Rangoon Lane, Cantonments. It distributes 90% of its income to investors .
HFC REIT
The HFC Real Estate Investment Trust was established in 1994 and is one of the oldest real estate investment vehicles in Ghana. It is an internally managed REIT that invests in securities of real estate companies and holds property for rental income. However, HFC REIT is not listed on the Ghana Stock Exchange and does not pay regular dividends—it reinvests all income into the portfolio.
Benefits of Investing in REITs
Affordability: You do not need millions of cedis to own commercial real estate. REITs allow you to invest in large properties in small amounts .
Diversification: A REIT typically owns multiple properties, spreading your risk across different buildings and tenants .
Liquidity: Publicly traded REITs can be bought and sold on the stock exchange, making them much easier to trade than physical property .
Professional Management: The properties are managed by professionals who handle leasing, maintenance, and tenant relations .
Regular Income: REITs are required to distribute most of their income to investors, providing a steady stream of dividends .
Tax Efficiency: The REIT itself is exempt from corporate income tax, meaning more of the rental income is available for distribution .
Risks to Consider
Market Risk: REIT unit prices can fluctuate based on market conditions, interest rates, and property values .
Liquidity Risk: If a REIT is not publicly traded, it may be difficult to sell your units quickly .
Concentration Risk: If a REIT owns only one or a few properties, a problem with one tenant or building can significantly affect income .
Management Risk: Poor decisions by the REIT manager can reduce returns.
Interest Rate Sensitivity: REITs can be sensitive to interest rate changes. When rates rise, REIT prices may fall.
REITs vs Direct Property Investment
| Feature | REITs | Direct Property |
|---|---|---|
| Minimum Investment | Low (units are affordable) | High (full property price) |
| Liquidity | High (if listed) | Low |
| Management | Professional | Self-managed |
| Diversification | Across multiple properties | Single property |
| Income | Regular dividends | Rental income |
| Tax | REIT exempt; investor pays 8% WHT | Varies |
How to Invest in a REIT in Ghana
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Identify a licensed REIT: Check with the SEC to confirm the REIT is properly licensed.
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Read the prospectus: Understand the REIT’s investment objectives, properties, fees, and distribution policy .
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Open an account: Through a licensed broker or the REIT manager.
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Buy units: If the REIT is listed on the Ghana Stock Exchange, you can buy units through a stockbroker.
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Receive distributions: REITs typically pay dividends quarterly or annually.
Quick Facts
| Topic | Details |
|---|---|
| Regulator | Securities and Exchange Commission (SEC) |
| Governing Guidelines | Securities Industry (REITs) Guidelines, 2019 |
| Minimum Revenue from Rent | 75% of revenue |
| Minimum Assets in Real Estate | 75% of total assets |
| Minimum Profit Distribution | 80% of distributable profit |
| Maximum Leverage | 40% of gross asset value |
| Maximum Single Property | 40% of portfolio |
| Tax at REIT Level | Exempt from corporate income tax |
| Tax at Investor Level | 8% withholding tax on distributions |
| Examples | Sentinel REIT, Rangoon REIT, HFC REIT |
Frequently Asked Questions
1. What is a REIT in Ghana?
A REIT (Real Estate Investment Trust) is a regulated investment vehicle that owns and manages income-generating real estate. Investors buy units and receive dividends from rental income .
2. How are REITs regulated in Ghana?
REITs are regulated by the Securities and Exchange Commission (SEC) under the Securities Industry (REITs) Guidelines, 2019.
3. What are the requirements to qualify as a REIT in Ghana?
A REIT must earn at least 75% of revenue from rents, hold at least 75% of assets in real estate, distribute at least 80% of profit, list within 3 years, keep leverage below 40%, and not invest more than 40% in a single property .
4. Are REITs tax-exempt in Ghana?
The REIT itself is exempt from corporate income tax. However, distributions to investors are subject to an 8% withholding tax .
5. How do REITs make money?
REITs earn money from rental income from their properties. They also benefit from property value appreciation. At least 80% of distributable profit must be paid to shareholders .
6. What REITs exist in Ghana?
Sentinel REIT, Rangoon REIT, and HFC REIT are examples of REITs operating in Ghana .
7. What is the difference between a REIT and direct property investment?
REITs offer lower minimum investment, higher liquidity (if listed), professional management, and diversification. Direct property requires larger capital and is less liquid .
8. What are the risks of investing in REITs?
Risks include market price fluctuations, liquidity risk (for non-traded REITs), concentration risk, management risk, and interest rate sensitivity.
9. How do I invest in a REIT in Ghana?
Identify a licensed REIT, read the prospectus, open an account through a broker or the REIT manager, and buy units. If listed on the GSE, you can buy through a stockbroker.
10. What is the minimum distribution requirement for REITs in Ghana?
REITs must distribute at least 80% of their distributable profit to shareholders .
11. Can foreigners invest in REITs in Ghana?
The guidelines do not restrict foreign investment in REITs, though foreign investors should be aware of the 8% withholding tax on distributions .
12. What is the maximum leverage a REIT can take in Ghana?
A REIT’s leverage ratio cannot exceed 40% of its gross asset value
Source: Accra Street Journal
Last Updated on September 18, 2026 by Samuel Kwame Boadu
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Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.
