· Addis Fortune
Ethiopian Securities Exchange (ESX), with FSD Africa and FSD Ethiopia, prepares to launch Real Estate Investment Trusts/Funds (REIT/Fs) and a Commercial Paper (CP) market.
Topics:Investment
Summary of the Addis Fortune report
Ethiopia’s financial sector is on the brink of a transformative shift as the Ethiopian Securities Exchange (ESX), with FSD Africa and FSD Ethiopia, prepares to launch Real Estate Investment Trusts/Funds (REIT/Fs) and a Commercial Paper (CP) market. This plans to deepen capital markets and open investment opportunities beyond the traditionally informal real estate sector. REIT/Fs, proven in markets like South Africa, Nigeria, and Kenya, will allow ordinary Ethiopians to invest in income-generating properties and earn regular dividends helping to attract foreign capital for infrastructure needs.
Key points
- The Ethiopian Securities Exchange is preparing to launch REIT/Fs and a commercial paper market with FSD Africa and FSD Ethiopia.
- REIT/Fs let ordinary Ethiopians invest in income-generating property and earn regular dividends.
- The plan aims to deepen capital markets and draw foreign capital beyond the informal real estate sector.
Real.et analysis
Addis Fortune reports that the Ethiopian Securities Exchange (ESX) is working with FSD Africa and FSD Ethiopia to launch Real Estate Investment Trusts and Funds (REIT/Fs) and a Commercial Paper (CP) market. The plan aims to deepen capital markets and open property investment beyond the informal sector. REIT/Fs already work in South Africa, Nigeria and Kenya. In Ethiopia, they would let ordinary people invest in income-producing property and receive regular dividends. The plan also aims to draw foreign capital for infrastructure.
What this means for investors
The two products serve different needs.
- REIT/Fs are for investors. You buy units in a fund that owns rental property, such as offices, malls or apartment blocks. The fund pays out part of the rental income as dividends. You do not deal with tenants or repairs.
- Commercial paper is short-term debt that companies issue to fund their operations. Developers with a good credit record could use it to finance construction for months at a time, instead of relying only on bank loans or buyer prepayments.
For savers, a REIT could be a way to earn rental income with less money than a whole apartment costs. Points to check before you invest:
- What properties the fund holds and where they are.
- How the fund values its buildings and how often.
- The fees the manager charges.
- How easily you can sell your units.
Kenya's experience shows that REITs can be slow to grow. Early products may be few and trade rarely.
What this means for buyers
If developers gain access to commercial paper, they may fund projects in a more stable way. That could reduce delays, although it does not remove developer risk.
Our guide to real estate developers in Ethiopia explains how developers fund projects today. Our house prices guide shows what direct ownership costs.
Background
FSD Africa and FSD Ethiopia are development organizations that support financial market growth. The ESX began trading in 2025.