GCR Upgrades SFS Capital Ratings on REITs Expertise
GCR Ratings has upgraded SFS Capital Nigeria Limited’s national-scale long-term and short-term issuer ratings to A(NG) and A1(NG), respectively, from A-(NG) and A2(NG), with a stable outlook.
In its rating note, GCR said the rating upgrade is hinged on SFS Capital Nigeria Limited’s improved competitive position, underpinned by growth in asset under management (AUM) and its expertise in Real Estate Investment Trusts (REITs).
The ratings also reflect a robust financial profile, characterised by an unlevered balance sheet, sound earnings and strong liquidity, the African-focused rating agency added.
SFS Capital is a mid-tier player in the Nigerian asset management subsector, with a moderate market share of about 2% of the industry’s total AUM in 2025.
Ratings analysts said, nonetheless, the asset manager continues to demonstrate strong expertise in REIT management, further reinforced by its appointment as manager of the N35.0 billion UPDC REIT in January 2026.
GCR revealed that SFS Capital currently manages three of the four publicly listed REITs in Nigeria, underscoring its niche dominance.
According to the rating note, as of 28 February 2026, SFS Capital’s total AUM increased by 67.5% to NGN190.0 billion from NGN113.4 billion as of 31 December 2024, underpinned by the addition of UPDC REIT, the revaluation of its existing REIT portfolios, and growth in other managed funds.
GCR said, “Looking ahead, ongoing plans to launch new funds could further support AUM growth and enhance earnings generation capacity over the next 12 to 18 months”.
Ratings analysts said the company’s cash flow and leverage remain major ratings strengths, supported by the asset manager’s sustained net ungeared position and a solid capital base.
The report highlighted that although SFS Capital has privately managed funds on its balance sheet, they are adequately matched with liquid assets.
Specifically, the asset manager indicated it does not guarantee returns on these funds, with the downside risks on the underlying financial assets borne solely by the fundholders.
Looking ahead, ratings analysts expect the asset manager’s cash flow to remain adequate to support operations, with its unlevered position sustained over the outlook period.
SFS Capital maintains a sound earnings profile, with gross revenue increasing by 30.0% to NGN824.2 million (USD0.5 million) in 2025, driven by improved management fees and commission.
Conversely, operating costs grew by 29.6% to NGN549.7 million, driven by higher staff costs and expanded operations. As a result, the company’s EBITDA margin moderated slightly to 33.2% as of 31 December 2025 (31 December 2024: 35.3%).
GCR anticipates that the recently added REIT and the planned launch of new funds will support the asset manager’s earnings generation capacity over the rating outlook.
“The asset manager’s liquidity position is a positive ratings factor, with liquidity sources covering anticipated uses by an average of 3.0x over the past three years.
“As of 31 December 2025, the liquidity coverage improved to 3.4x (December 2024: 2.7x), largely driven by additional capital of NGN768.6 million during the year.”
Looking ahead, GCR said the liquidity position is expected to remain robust, supported by a highly liquid balance sheet, sound operating cash flow, and planned capital injections to meet the new regulatory capital requirements.
The stable outlook reflects the expectation that SFS Capital will maintain a sound financial profile over the rating horizon, supported by strong earnings, robust liquidity coverage, and an unlevered balance sheet, GCR said. Additionally, the launch of a new REIT and planned dollar fund could further strengthen the asset manager’s business profile. Zenith Bank Names Kennedy Okwudili Executive Director
