APPLICATION AND PERFORMANCE OF PENSION FUND IN REAL ESTATE INVESTMENT FINANCING IN NIGERIA

This study aimed at determining the effects of the application of real estate investment instruments on the performance of pension fund in real estate investment financing in Nigeria with the view of making recommendations for improved investing. The two real estate investment instruments studied were Real Estate Investment Trusts (REITs) and investing in Direct Real Estate Property (DREP). Three objectives were set to achieve this aim. First, to determine the application of real estate instruments in the investing of pension fund in Nigeria. Second, to determine the performance of pension fund in real estate investment financing in Nigeria. Third, to establish the relationship between application of real estate investment instruments and performance of pension fund in real estate financing in Nigeria. Secondary data from National Pension Commission (PenCom) was used to do this research and the study period was 2012 to 2021. Data were analysed using percentages and Multiple Regression Analysis. Findings showed that, the application of the investment instruments is poor with REIT and DREP asset classes having respective averages of 0.064% and 0.009%. Findings showed that, the performance of pension fund in real estate financing is poor with the average of 13.15%. The regression result showed that, the application of REIT has negative relationship with performance while that of DREP has positive relationship with correlation coefficients of –0.543 and 0.794 respectively. Based on findings it is concluded that, REIT asset class impacted negatively on performance while DREP asset class impacted positively. For there to be improved participation of pension fund in real estate financing it is recommended that, there must be increased investments in REIT and that, the range of investments in DREP should be maintained or most pleasantly increased. For there to be improved investing, it is further recommended that more real estate investment instruments be introduced.