Monday, January 14, 2008
Panama City Office Market View
CBRE Panama has an interesting report on the office building market with numbers from the 2006 market:
Panama has experienced a strong recovery and real estate market activity has rebounded in 2006.
Although a significant volume of new Class A buildings were delivery to the market in the first quarter of 2006, lease rates and sales prices have remained relatively stable and are expected to increase once the available space is absorbed.
Construction activity remains strong in the residential market, but has slowed the price in commercial spaces. Panama is steadily positioning itself as a top second home or retirement haven for foreigners within the region. The positive result of a nationwide referendum about the ambitious Panama Canal expansion project has attracted the attention of international companies for related business and offshore relocations.
Furthermore, economic growth projections accounting this project are 2% higher than former estimates.
The Class A office buildings that have been delivered on the first semester, doubling the existing stock have been relatively fast absorbed.
At present, there are few buildings in construction, and in planning stage.
Although inflation and oil prices increased since last year, the Panamanian economy grew of 6.5%.
Panama maintains the best performance of Central America in Foreign Direct Investment (FDI) for the fifth consecutive year, and figures among the top 10 recipients in Latin America.
The overall economic growth in fueled by and increase in tourism, exports of non-traditional products, Free Trade Zone at Colon, and the Panama Canal project expectations.
The construction of the Port of Farfan and the reopening of the former military airport of Howard, both located in the Panama Pacific logistics zone at the west of the city are starting. Dell and other tenants already out of this area, and Singapore Technologies Aerospace is establishing an aircraft maintenance facility. Call center activity, plenty of fiscal incentives, is also strong, and now complemented by back office facilities coming offshore.
Given the current stable political and economic conditions, prospects for Panama�s office market remain positive.
Things may have changed in 2007 but the outlook remains positive. The full text of the report can be downloaded from http://www.cbre.com.pa/PDFs/Panama3q06Ofc-Eng.pdf