May Real Estate and Economic Update from Panama
Greetings from Panama Equity!
This month we explore a new President, a growing economy, and an
interesting investment option in the near future
It has been a very interesting last few weeks here in Panama. Ricardo
Martinelli, the Panamanian business tycoon and owner of the Super 99
supermarket chain won the presidential election in a landslide, and
everyone here is eagerly awaiting his promised changes. Martinelli made a
number of far-reaching commitments to the people of Panama, and the expat
community stands to benefit greatly from many of his proposed new
initiatives.
First and foremost on Martinelli's agenda is a major transportation
overhaul, including a proposed light rail system that will alleviate
Panama's growing traffic problem. He has also suggested some far reaching
tax changes that could open up many new opportunities for foreign owned
businesses. Another priority for the new administration will be courting
the US Congress to insure that the free trade agreement with Panama is
finally passed. Promises are all that we have right now, but come July
1st, we will have a much better idea of what this Martinelli guy is really
about. I for one am extremely hopeful and think he could change the face
of this country.
Overall, the economy' in Panama is in pretty good shape, all things
considered. Shipping volume is down, but that's to be expected and will
probably continue until demand picks up in North America. New construction
starts have slowed drastically, which I believe is great news for the real
estate market here. We have been starting to see pricing pressure from a
perceived oversupply on the residential side, so any slow down is good news
for the long term.
I still think prices have not bottomed out, and I expect to see a lot more
" deals " as speculators are forced to liquidate their positions once their
final payments are due and their pre-construction "project" becomes
reality. We're already seeing a correction in city prices for condos in
the $200,000 plus range, and rent rolls are declining as well.
Just like anything, this is a real estate cycle, and because Panama was
built on foreign capital, we're naturally seeing some correction as that
foreign capital becomes less available. Good news is, Panama is already one
of the brightest stars in Latin America this year, and 2010 will likely
show a return to the double digit growth as the canal expansion project
goes into full swing.
42% Growth in Industrial Sector
Recession? What recession?
Growth in the industrial sector of Panama grew over 42% in the month of
March compared to last year during the same time, according to the May 12th
Martes Financerio. These kind of numbers are a very positive sign for the
macro economic picture in Panama, and this type of growth will inevitably
affect other other areas, including housing absorption and local commercial
growth.
One particular company that the report highlighted was Cemex, the
worldwide producer of concrete based out of Mexico and with locations all
over Panama. Cemex will be ramping up production capacity in anticipation
of the Canal Amplification project, which is already underway. The " big "
contract is expected to be awarded in August, when bids that have been
sealed in a vault will be opened. Stay tuned here for the results of the
big one!
It's nice to report the good news, but the picture isn't as rosy as some
would have you believe. The cost of living is increasing at an alarming
pace, and while it is still a fraction of what we are used to paying in the
States, Panamanians made this a major issue at the polls. Energy costs
have been going up for the past two years and Panama remains one of the
most expensive countries in Latin America in terms of cost per kilowatt
hour. President-elect Martinelli has vowed to combat rising energy costs
through continued investment in power generation capacity, some of which
will be coming online as early as the 4th quarter of this year.
Other interesting headlines in this past week's local press included
exciting news from Hilton Hotels, who have committed over $569,000,000 to
new hotel projects, some of which will be ready by the end of this year.
Anyone that's been to Panama between December and April know how difficult
it has been to find a decent hotel room, so this is welcome news to all of
us real estate agents who end up scrambling to help them find a place!
Hilton's new Panama Brands include Embassy Suites, Double Tree, and Hilton
Garden Inns.
Announcing Panama Pacifico
Massive project across the bridge
Breathtaking is about the only word I can use to describe the setting of
the new Panama Pacifico project,located on the former Howard air force base
just ten minutes outside of Panama City.
Anyone considering moving business operations to Panama needs to give this
mixed use project a very serious look. Reason being is Law 41, which
essentially creates another free trade zone where qualified businesses will
be exempt from any and all taxes, including import duties, sales tax,
capital gains taxes, and a laundry list of other benefits including a " one
stop shop " government office. The master plan is impressive to say the
least, and their 40 year time frame shows a commitment to progress and the
vision to carve something amazing out of the beautiful piece of land that
they acquired back in 2006.
Construction began last year, and London Regional will be delivering the
first commercial spaces in their International Business Park in August. A
few big names have already signed leases including 3M, Catepilliar, and
several large logistics and shipping oriented companies.
Why haven’t you heard about this project yet? Because there's nothing
for sale (it's all leased space), but that will all change in about six
months when the developers announce the residential component of the
project. Up until now, they have been focusing on developing the
infrastructure and courting big business for their commercial and
industrial parks which are about half way done.
It seems like the global trend in construction right now is towards
sustainable, mixed use development focusing on amenities, infrastructure,
and services. Basically, a self contained community that offers jobs,
housing, good infrastructure, and everything one would need to live and
work. Up until now, projects like this have not been seen in Latin
America, but thanks to the cooperation between the government of Panama and
the developer of the project, London Regional, this plan is coming to
fruition and will no doubt create more jobs and bring yet more
international exposure to Panama.
I'll include an update on the project once they start releasing
residential space, because if everything goes according to plan, early
investors could see tremendous returns on a project like this.
That's all Folks!
Im still down here selling real estate, working hard to make sure that my
clients are well taken care of. If you know anyone that might be
interested in learning more about the big things happening in this little
country, use the " forward to a friend " button on the bottom of this
email.
As Always, I hope this note finds you well. Have a great week!
-
-
- Kent Davis
[http://www.equitypanama.com/] www.equitypanama.com
" Making it Happen inPanama "
( 011 ) 507 6030 - 6782
Skype: kentpd22
Introducing Kent's Picks
As the global crisis will likely worsen before it gets better, odds are
there are going to be some exceptional deals that become available here. As
aggressive foreign investment cools off, opportunities will arise.
Kent's Picks represents the best deals on the market right now. Basically
a distilled list of exceptionally priced property from all over the
country. Last month, we featured a few existing condos, a piece of land,
and a pre-construction reassignment offer. Each month will have a
different focus, but rest assured that all of these lists will be nothing
but exceptionally priced real estate deals. All of this month I have been
focusing on on finding " turn-key " investments- basically money makers
from day one. Most of these are either tenant occupied residential
opportunities, or healthy, successful businesses for sale.
Sign up for Kent's Picks by
[mailto:[email protected]?subject=Kent%27s%20Picks] emailing me today!
Ocean View Villa
Infinity pool, furnished
2br/2ba $130,000
Amador Causeway
Best views of the City
1br/1ba $275,000
Playa Blanca
Resort Lifestyle
2br/2ba $240,000
Trump Ocean Club
Sales At or Below Cost
$350,000 and up
More about Your Man in Panama-
Kent Davis
Making it Happen in Panama!
Have a Look at My Links
- [http://www.biggerpockets.com/blogs/404] Blog
- [http://www.linkedin.com/in/kentpd] Linked In Profile
-
[http://www.thepanamareport.com/real-estate-in-panama/panama-investment/panama-real-estate-warning---blood-on-the-streets-739.html]
Blood on the Streets
- [http://www.buscapanama.net/] Panama Nightlife
This month we explore a new President, a growing economy, and an
interesting investment option in the near future
It has been a very interesting last few weeks here in Panama. Ricardo
Martinelli, the Panamanian business tycoon and owner of the Super 99
supermarket chain won the presidential election in a landslide, and
everyone here is eagerly awaiting his promised changes. Martinelli made a
number of far-reaching commitments to the people of Panama, and the expat
community stands to benefit greatly from many of his proposed new
initiatives.
First and foremost on Martinelli's agenda is a major transportation
overhaul, including a proposed light rail system that will alleviate
Panama's growing traffic problem. He has also suggested some far reaching
tax changes that could open up many new opportunities for foreign owned
businesses. Another priority for the new administration will be courting
the US Congress to insure that the free trade agreement with Panama is
finally passed. Promises are all that we have right now, but come July
1st, we will have a much better idea of what this Martinelli guy is really
about. I for one am extremely hopeful and think he could change the face
of this country.
Overall, the economy' in Panama is in pretty good shape, all things
considered. Shipping volume is down, but that's to be expected and will
probably continue until demand picks up in North America. New construction
starts have slowed drastically, which I believe is great news for the real
estate market here. We have been starting to see pricing pressure from a
perceived oversupply on the residential side, so any slow down is good news
for the long term.
I still think prices have not bottomed out, and I expect to see a lot more
" deals " as speculators are forced to liquidate their positions once their
final payments are due and their pre-construction "project" becomes
reality. We're already seeing a correction in city prices for condos in
the $200,000 plus range, and rent rolls are declining as well.
Just like anything, this is a real estate cycle, and because Panama was
built on foreign capital, we're naturally seeing some correction as that
foreign capital becomes less available. Good news is, Panama is already one
of the brightest stars in Latin America this year, and 2010 will likely
show a return to the double digit growth as the canal expansion project
goes into full swing.
42% Growth in Industrial Sector
Recession? What recession?
Growth in the industrial sector of Panama grew over 42% in the month of
March compared to last year during the same time, according to the May 12th
Martes Financerio. These kind of numbers are a very positive sign for the
macro economic picture in Panama, and this type of growth will inevitably
affect other other areas, including housing absorption and local commercial
growth.
One particular company that the report highlighted was Cemex, the
worldwide producer of concrete based out of Mexico and with locations all
over Panama. Cemex will be ramping up production capacity in anticipation
of the Canal Amplification project, which is already underway. The " big "
contract is expected to be awarded in August, when bids that have been
sealed in a vault will be opened. Stay tuned here for the results of the
big one!
It's nice to report the good news, but the picture isn't as rosy as some
would have you believe. The cost of living is increasing at an alarming
pace, and while it is still a fraction of what we are used to paying in the
States, Panamanians made this a major issue at the polls. Energy costs
have been going up for the past two years and Panama remains one of the
most expensive countries in Latin America in terms of cost per kilowatt
hour. President-elect Martinelli has vowed to combat rising energy costs
through continued investment in power generation capacity, some of which
will be coming online as early as the 4th quarter of this year.
Other interesting headlines in this past week's local press included
exciting news from Hilton Hotels, who have committed over $569,000,000 to
new hotel projects, some of which will be ready by the end of this year.
Anyone that's been to Panama between December and April know how difficult
it has been to find a decent hotel room, so this is welcome news to all of
us real estate agents who end up scrambling to help them find a place!
Hilton's new Panama Brands include Embassy Suites, Double Tree, and Hilton
Garden Inns.
Announcing Panama Pacifico
Massive project across the bridge
Breathtaking is about the only word I can use to describe the setting of
the new Panama Pacifico project,located on the former Howard air force base
just ten minutes outside of Panama City.
Anyone considering moving business operations to Panama needs to give this
mixed use project a very serious look. Reason being is Law 41, which
essentially creates another free trade zone where qualified businesses will
be exempt from any and all taxes, including import duties, sales tax,
capital gains taxes, and a laundry list of other benefits including a " one
stop shop " government office. The master plan is impressive to say the
least, and their 40 year time frame shows a commitment to progress and the
vision to carve something amazing out of the beautiful piece of land that
they acquired back in 2006.
Construction began last year, and London Regional will be delivering the
first commercial spaces in their International Business Park in August. A
few big names have already signed leases including 3M, Catepilliar, and
several large logistics and shipping oriented companies.
Why haven’t you heard about this project yet? Because there's nothing
for sale (it's all leased space), but that will all change in about six
months when the developers announce the residential component of the
project. Up until now, they have been focusing on developing the
infrastructure and courting big business for their commercial and
industrial parks which are about half way done.
It seems like the global trend in construction right now is towards
sustainable, mixed use development focusing on amenities, infrastructure,
and services. Basically, a self contained community that offers jobs,
housing, good infrastructure, and everything one would need to live and
work. Up until now, projects like this have not been seen in Latin
America, but thanks to the cooperation between the government of Panama and
the developer of the project, London Regional, this plan is coming to
fruition and will no doubt create more jobs and bring yet more
international exposure to Panama.
I'll include an update on the project once they start releasing
residential space, because if everything goes according to plan, early
investors could see tremendous returns on a project like this.
That's all Folks!
Im still down here selling real estate, working hard to make sure that my
clients are well taken care of. If you know anyone that might be
interested in learning more about the big things happening in this little
country, use the " forward to a friend " button on the bottom of this
email.
As Always, I hope this note finds you well. Have a great week!
-
-
- Kent Davis
[http://www.equitypanama.com/] www.equitypanama.com
" Making it Happen inPanama "
( 011 ) 507 6030 - 6782
Skype: kentpd22
Introducing Kent's Picks
As the global crisis will likely worsen before it gets better, odds are
there are going to be some exceptional deals that become available here. As
aggressive foreign investment cools off, opportunities will arise.
Kent's Picks represents the best deals on the market right now. Basically
a distilled list of exceptionally priced property from all over the
country. Last month, we featured a few existing condos, a piece of land,
and a pre-construction reassignment offer. Each month will have a
different focus, but rest assured that all of these lists will be nothing
but exceptionally priced real estate deals. All of this month I have been
focusing on on finding " turn-key " investments- basically money makers
from day one. Most of these are either tenant occupied residential
opportunities, or healthy, successful businesses for sale.
Sign up for Kent's Picks by
[mailto:[email protected]?subject=Kent%27s%20Picks] emailing me today!
Ocean View Villa
Infinity pool, furnished
2br/2ba $130,000
Amador Causeway
Best views of the City
1br/1ba $275,000
Playa Blanca
Resort Lifestyle
2br/2ba $240,000
Trump Ocean Club
Sales At or Below Cost
$350,000 and up
More about Your Man in Panama-
Kent Davis
Making it Happen in Panama!
Have a Look at My Links
- [http://www.biggerpockets.com/blogs/404] Blog
- [http://www.linkedin.com/in/kentpd] Linked In Profile
-
[http://www.thepanamareport.com/real-estate-in-panama/panama-investment/panama-real-estate-warning---blood-on-the-streets-739.html]
Blood on the Streets
- [http://www.buscapanama.net/] Panama Nightlife
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