Real Estate Blogs Directory
- Directory of real estate blogs and blogs of industries affiliated with and serving the real estate industry.
Wednesday, January 31, 2007
Tuesday, January 30, 2007
Panama Real Estate
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Panama Real Estate
Since the Spanish Conquest, Panama has held a privileged geographic, commercial and cultural position. Panama was first visited by Europeans in 1501 on an expedition led by Rodrigo de Bastidas. Santa Maria la Antigua del Darien was the first city on “terra firme”, founded by Christopher Colombus. After crossing Panama, Vasco Nuñez arrived at the Pacific Ocean, and it was then that the Isthmus gained importance as a passageway, which is still true today.
From this era, the first “Panama Real Estate” was erected, including numerous stone buildings. In the 16th century, these buildings were part of Panama’s city center, known today as Panama City “La Vieja,” which was destroyed by the pirate Henry Morgan in 1671. Nowadays, these buildings provide Panama City with a beautiful historical landmark. The total destruction and looting led to the construction of a new Panama City in 1673, which is better known today as Casco Antiguo, named a heritage for humanity by UNESCO in 1997 and is presently one of the city’s most valuable real estate sectors.
From Avenida Balboa one can actually observe the stark contrast between the past, present and future of Panama. At one extreme is Casco Viejo, the oldest city on the Pacific Coast of the Americas. Casco Viejo’s architecture is a mixture of influences from the Spanish Explorers and French Colonial, from the first attempt made by the French to build the Panama Canal. Punta Paitilla, also visible from Avenida Balboa, is a well established residential zone possessing the highest concentration of skyscrapers in Panama City. Next to Punta Paitilla is Punta Pacifica, an up and coming residential zone undergoing an immense amount of construction, including the well known Trump Ocean Club, among other breathtakingly beautiful high rise towers, all with unobstructed ocean front views.
The Real Estate Boom in Panama – A Property for Everyone
Though Panama is small in size, its variety of real estate is huge. The spectrum of Panama real estate includes properties on deserted islands, spectacular beaches, highland estates and apartments in the center of the metropolitan Panama City. Panama offers unparalleled opportunities for investors, businessmen and retirees looking for a change of pace.
Panama’s unique characteristics, such as its circulating currency (the United States dollar), social and political stability, the warmth of the people and the beauty of the environment, have converted Panama into a favorite destination for many travel buffs. Furthermore, these same characteristics have provided the fuel for the real estate boom currently taking place in Panama.
In Panama’s highlands, one can find a mild climate, ideal for farming, raising livestock or simply enjoying oneself. The quality and beauty of its beaches and crystalline waters, on both the Pacific and Atlantic coasts, separated by a two hour drive, leave many breathless and yearning to return. Or, better yet, purchase real estate and make it a second home or retirement destination.
Panama City, the capital of the Republic of Panama, is a bustling and fully functional business center, possessing all the comforts of the first world, not to mention all the vitality and liveliness of its yearly “Carnavales” parties.
Thanks to these and other advantages, the industry experiencing the largest amount of growth in Panama is real estate, with over 70% of projects intended for retirees from North America and Europe.
Investment Opportunities in Panama
The real estate boom in Panama can be attributed to various factors. Firstly, legislation was passed providing incentives for developers and buyers, including extremely beneficial exonerations and subsidies for the real estate industry in Panama. The favorable laws have attracted well known, powerful foreign investors to Panama, including Donald Trump, who is developing the Trump Ocean Club, a project that includes a hotel, casino, yacht and beach club and condominiums, among other comforts.
Panama’s beauty and benefits has contributed to its international fame as a popular destination for retirees, given its comforts and low cost of living. In Panama, there are currently around 15,000 North Americans that can live well on $2000 dollars per month.
Furthermore, 30-year financing is available from recognized financial institutions for approximately 80% of the property’s value. However, please seek the advice of a legal professional.
Panama has been an interesting destination for the traveler, businessman and immigrant since colonial times. The real estate boom will undoubtedly lead to the rediscovering of this tropical paradise.
Written by Mona Sutherland and Julieta Ledezma
Panama Real Estate
Since the Spanish Conquest, Panama has held a privileged geographic, commercial and cultural position. Panama was first visited by Europeans in 1501 on an expedition led by Rodrigo de Bastidas. Santa Maria la Antigua del Darien was the first city on “terra firme”, founded by Christopher Colombus. After crossing Panama, Vasco Nuñez arrived at the Pacific Ocean, and it was then that the Isthmus gained importance as a passageway, which is still true today.
From this era, the first “Panama Real Estate” was erected, including numerous stone buildings. In the 16th century, these buildings were part of Panama’s city center, known today as Panama City “La Vieja,” which was destroyed by the pirate Henry Morgan in 1671. Nowadays, these buildings provide Panama City with a beautiful historical landmark. The total destruction and looting led to the construction of a new Panama City in 1673, which is better known today as Casco Antiguo, named a heritage for humanity by UNESCO in 1997 and is presently one of the city’s most valuable real estate sectors.
From Avenida Balboa one can actually observe the stark contrast between the past, present and future of Panama. At one extreme is Casco Viejo, the oldest city on the Pacific Coast of the Americas. Casco Viejo’s architecture is a mixture of influences from the Spanish Explorers and French Colonial, from the first attempt made by the French to build the Panama Canal. Punta Paitilla, also visible from Avenida Balboa, is a well established residential zone possessing the highest concentration of skyscrapers in Panama City. Next to Punta Paitilla is Punta Pacifica, an up and coming residential zone undergoing an immense amount of construction, including the well known Trump Ocean Club, among other breathtakingly beautiful high rise towers, all with unobstructed ocean front views.
The Real Estate Boom in Panama – A Property for Everyone
Though Panama is small in size, its variety of real estate is huge. The spectrum of Panama real estate includes properties on deserted islands, spectacular beaches, highland estates and apartments in the center of the metropolitan Panama City. Panama offers unparalleled opportunities for investors, businessmen and retirees looking for a change of pace.
Panama’s unique characteristics, such as its circulating currency (the United States dollar), social and political stability, the warmth of the people and the beauty of the environment, have converted Panama into a favorite destination for many travel buffs. Furthermore, these same characteristics have provided the fuel for the real estate boom currently taking place in Panama.
In Panama’s highlands, one can find a mild climate, ideal for farming, raising livestock or simply enjoying oneself. The quality and beauty of its beaches and crystalline waters, on both the Pacific and Atlantic coasts, separated by a two hour drive, leave many breathless and yearning to return. Or, better yet, purchase real estate and make it a second home or retirement destination.
Panama City, the capital of the Republic of Panama, is a bustling and fully functional business center, possessing all the comforts of the first world, not to mention all the vitality and liveliness of its yearly “Carnavales” parties.
Thanks to these and other advantages, the industry experiencing the largest amount of growth in Panama is real estate, with over 70% of projects intended for retirees from North America and Europe.
Investment Opportunities in Panama
The real estate boom in Panama can be attributed to various factors. Firstly, legislation was passed providing incentives for developers and buyers, including extremely beneficial exonerations and subsidies for the real estate industry in Panama. The favorable laws have attracted well known, powerful foreign investors to Panama, including Donald Trump, who is developing the Trump Ocean Club, a project that includes a hotel, casino, yacht and beach club and condominiums, among other comforts.
Panama’s beauty and benefits has contributed to its international fame as a popular destination for retirees, given its comforts and low cost of living. In Panama, there are currently around 15,000 North Americans that can live well on $2000 dollars per month.
Furthermore, 30-year financing is available from recognized financial institutions for approximately 80% of the property’s value. However, please seek the advice of a legal professional.
Panama has been an interesting destination for the traveler, businessman and immigrant since colonial times. The real estate boom will undoubtedly lead to the rediscovering of this tropical paradise.
Written by Mona Sutherland and Julieta Ledezma
Monday, January 22, 2007
Six thousand newborn turtles are set free
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VERAGUAS. In 2006, at least six thousand newborn turtles were set free through Malena beach community’s conservation program, which is supported by the “Autoridad Nacional del Ambiente” (National Environment Authority, or ANAM), private organizations and authorities of the Mariato district.
It was this information that Isis Pinto, director of education of the “Fundación MarViva” (Foundation Living Sea), informed those in attendance at their annual presentation of activities. She added that the coming year will reinforce community participation. Work will begin this summer, including training directed at teaching awareness to the children of the Malena community.
Information extracted from La Prensa
VERAGUAS. In 2006, at least six thousand newborn turtles were set free through Malena beach community’s conservation program, which is supported by the “Autoridad Nacional del Ambiente” (National Environment Authority, or ANAM), private organizations and authorities of the Mariato district.
It was this information that Isis Pinto, director of education of the “Fundación MarViva” (Foundation Living Sea), informed those in attendance at their annual presentation of activities. She added that the coming year will reinforce community participation. Work will begin this summer, including training directed at teaching awareness to the children of the Malena community.
Information extracted from La Prensa
Tuesday, January 16, 2007
Coming Soon: Panama-Colon Freeway
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Citigroup Inc., the world’s largest bank, and the Banco Nacional de Fomento Económico y Social de Brasil (Bndes), the Brazilian government’s primary investment bank, will finance the construction of the second stretch of the Panama-Colon freeway, a total investment of 215.8 million dollars.
Despite the prolonged negotiation process, a decision has been made to continue the construction of the Panama-Colon freeway. A vote among members of the Cabinet Meeting unanimously approved the development’s partial transfer from the Mexican company Proyectos y Construcciones, S.A. to the Brazilian construction company Norberto Odebrecht S.A. for the construction, operation, maintenance and expansion of the Panama-Colon Highway. Odebrecht S.A. has over 60 years of experience carrying out macro-projects in Latin America, including the Remigio Roja irrigation project in Alanje, Chiriqui. The financial resources will be administered through a BNP Paribas controlled trust.
The Banco Nacional de Panamá will provide a 100 million dollar loan for one year at 6.25% annual. The Ministry of Economics and Finances evaluated five bank offers to finance the entire freeway, among them the Banco Nacional. Luis Manuel Hernández, the vice secretary of Public Works, mentioned that the temporary loan will allow construction to begin at the end of January. The job entails constructing 26.5-miles of freeway at a cost of five million dollars per 0.62-mile, and is expected to be completed in 24 months.
The infrastructure will unite the work done by Pycsa, which consisted of only 8-miles at a cost of 84 million dollars, or 6.5 million per 0.62-miles.
This expansion is a positive move for a variety of reasons. The Government considers the project to be of utmost economic importance to the Colon province. Panamanian President Martin Torrijos commented that this project will provide direct and progressive employment for approximately 1,800 residents of the Colon Province over the next two years. Furthermore, it is expected that there will be less highway related accidents due to safer traveling conditions and an increase in tourism on the Caribbean coast of the country.
Citigroup Inc., the world’s largest bank, and the Banco Nacional de Fomento Económico y Social de Brasil (Bndes), the Brazilian government’s primary investment bank, will finance the construction of the second stretch of the Panama-Colon freeway, a total investment of 215.8 million dollars.
Despite the prolonged negotiation process, a decision has been made to continue the construction of the Panama-Colon freeway. A vote among members of the Cabinet Meeting unanimously approved the development’s partial transfer from the Mexican company Proyectos y Construcciones, S.A. to the Brazilian construction company Norberto Odebrecht S.A. for the construction, operation, maintenance and expansion of the Panama-Colon Highway. Odebrecht S.A. has over 60 years of experience carrying out macro-projects in Latin America, including the Remigio Roja irrigation project in Alanje, Chiriqui. The financial resources will be administered through a BNP Paribas controlled trust.
The Banco Nacional de Panamá will provide a 100 million dollar loan for one year at 6.25% annual. The Ministry of Economics and Finances evaluated five bank offers to finance the entire freeway, among them the Banco Nacional. Luis Manuel Hernández, the vice secretary of Public Works, mentioned that the temporary loan will allow construction to begin at the end of January. The job entails constructing 26.5-miles of freeway at a cost of five million dollars per 0.62-mile, and is expected to be completed in 24 months.
The infrastructure will unite the work done by Pycsa, which consisted of only 8-miles at a cost of 84 million dollars, or 6.5 million per 0.62-miles.
This expansion is a positive move for a variety of reasons. The Government considers the project to be of utmost economic importance to the Colon province. Panamanian President Martin Torrijos commented that this project will provide direct and progressive employment for approximately 1,800 residents of the Colon Province over the next two years. Furthermore, it is expected that there will be less highway related accidents due to safer traveling conditions and an increase in tourism on the Caribbean coast of the country.
Real Estate: Panama Boom Despite Setback - Monday, January 15, 2007
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Speculators and buyers fuel continued real estate boom in Panama.
BY CHRONICLE STAFF
It was supposed to be the tallest building in Latin America. Instead, the Palacio de la Bahia is now history. Construction has now stopped due to a combination of permit and financial problems that have hit the developer, Spain-based Olloqui Group.
The news comes after increasing debate about the soundness of the unprecedented real estate boom in Panama, with some observers claiming it is a bubble waiting to burst.
However, real estate experts say the investments will continue their strong growth. "The flow of investment dollars into Panama continues at a breathtaking pace," says Paul McBride, CEO of real estate consulting firm Prima Panama. "Clearly, there is no shortage of investors, or investment funds, to continue fueling the speculative boom."
Over the next five years, nearly 11,000 apartment units will be built in Panama City, the company forecasts based on a recent survey. By comparison, a total of 11,967 apartments were completed in the Miami metro area between January 1st, 1995 and March 31st, 2006. "This means that in just the next five years, nearly as many apartments will be built in Panama City than were built in the entire city of Miami during the past 10 years," PrimaPanama said in its survey.
While Prima Panama and other experts warn that there may be too much supply, experts say that much of the boom is also driven by real growth in demand. Rogerio Basso, an analyst at Ernst & Young's real estate advisory services, says Panama is still one of the key growth markets in Latin America for U.S. baby boomers looking at retirement or second homes.
Meanwhile, title insurance companies like First American Title Insurance Company report strong growth in Panama as well.
While the news about the Palacio de la Bahia project sent a chilling signal to real estate investors, other major projects are still on course for completion. They include the 104-story residential and hotel building, Ice Tower, which is slated for completion in 2010; the 62-story Trump Ocean Club International Hotel and Tower (with 2009 opening date) and a multitower center of apartments, hotel and commercial mall developed by Spain-based Grupo Mall.
There is also a strong real estate boom outside of Panama City in areas like Boquete, Coronado and Contadora. However, the lion's share of new construction and investment is taking place in the capital.
The number of new apartments being developed in the Panama City area has gone from 10,980 units in July 2006 to 20,603 units units in December, an increase of 88 percent, according to research by Prima Panama. Their estimated market value went from $3.17 billion to $5.16 billion, an increase of 63 percent.
The high-end apartments appear to target foreign buyers, but McBride questions how viable that market is. "Because the current demand for high end condominiums by the local market does not seem to justify this level of building activity, it was assumed that these new apartments were aimed at foreign buyers [but] the current level of foreign immigration is below the level needed to absorb the supply of apartments coming into the market over the next six years," he says.
Walter Molano, head of research at BCP Securities, has also questioned the sustainability of the real estate offer in Panama. "Panama is a speculative bubble waiting to burst," he wrote in a guest column in Latin Business Chronicle in September.
Jon Hanna of Panama Offshore Services disagrees. "The construction market and price increases will slow and level off from time to time as they would in any rising market," he wrote in a rebuttal here. "However, the trend is firmly established."
Apart from baby boomers, demand for Panama real estate will also be driven by a growing number of executives and workers coming to the country to participate in the $5.2 billion expansion of the Panama Canal and the construction of an oil refinery by US-based oil giant Occidental.
In the interim, the construction of new builings and resorts in Panama continues at full speed.
© Copyright Latin Business Chronicle
Speculators and buyers fuel continued real estate boom in Panama.
BY CHRONICLE STAFF
It was supposed to be the tallest building in Latin America. Instead, the Palacio de la Bahia is now history. Construction has now stopped due to a combination of permit and financial problems that have hit the developer, Spain-based Olloqui Group.
The news comes after increasing debate about the soundness of the unprecedented real estate boom in Panama, with some observers claiming it is a bubble waiting to burst.
However, real estate experts say the investments will continue their strong growth. "The flow of investment dollars into Panama continues at a breathtaking pace," says Paul McBride, CEO of real estate consulting firm Prima Panama. "Clearly, there is no shortage of investors, or investment funds, to continue fueling the speculative boom."
Over the next five years, nearly 11,000 apartment units will be built in Panama City, the company forecasts based on a recent survey. By comparison, a total of 11,967 apartments were completed in the Miami metro area between January 1st, 1995 and March 31st, 2006. "This means that in just the next five years, nearly as many apartments will be built in Panama City than were built in the entire city of Miami during the past 10 years," PrimaPanama said in its survey.
While Prima Panama and other experts warn that there may be too much supply, experts say that much of the boom is also driven by real growth in demand. Rogerio Basso, an analyst at Ernst & Young's real estate advisory services, says Panama is still one of the key growth markets in Latin America for U.S. baby boomers looking at retirement or second homes.
Meanwhile, title insurance companies like First American Title Insurance Company report strong growth in Panama as well.
While the news about the Palacio de la Bahia project sent a chilling signal to real estate investors, other major projects are still on course for completion. They include the 104-story residential and hotel building, Ice Tower, which is slated for completion in 2010; the 62-story Trump Ocean Club International Hotel and Tower (with 2009 opening date) and a multitower center of apartments, hotel and commercial mall developed by Spain-based Grupo Mall.
There is also a strong real estate boom outside of Panama City in areas like Boquete, Coronado and Contadora. However, the lion's share of new construction and investment is taking place in the capital.
The number of new apartments being developed in the Panama City area has gone from 10,980 units in July 2006 to 20,603 units units in December, an increase of 88 percent, according to research by Prima Panama. Their estimated market value went from $3.17 billion to $5.16 billion, an increase of 63 percent.
The high-end apartments appear to target foreign buyers, but McBride questions how viable that market is. "Because the current demand for high end condominiums by the local market does not seem to justify this level of building activity, it was assumed that these new apartments were aimed at foreign buyers [but] the current level of foreign immigration is below the level needed to absorb the supply of apartments coming into the market over the next six years," he says.
Walter Molano, head of research at BCP Securities, has also questioned the sustainability of the real estate offer in Panama. "Panama is a speculative bubble waiting to burst," he wrote in a guest column in Latin Business Chronicle in September.
Jon Hanna of Panama Offshore Services disagrees. "The construction market and price increases will slow and level off from time to time as they would in any rising market," he wrote in a rebuttal here. "However, the trend is firmly established."
Apart from baby boomers, demand for Panama real estate will also be driven by a growing number of executives and workers coming to the country to participate in the $5.2 billion expansion of the Panama Canal and the construction of an oil refinery by US-based oil giant Occidental.
In the interim, the construction of new builings and resorts in Panama continues at full speed.
© Copyright Latin Business Chronicle
Latin America Real Estate: Continued Growth - Monday, January 15, 2007
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US baby boomers and European investors are helping spur the market. But growth and prices are slowing down.
BY CHRONICLE STAFF
Despite growing political tension in some countries, the real estate sector in Latin America continues to see strong growth.
"The fundamentals of the region continue to be sound, despite some concern on the potential collateral effect of the slowdown in the U.S. real estate market in other regions of the globe," says Rogerio Basso, an analyst at Ernst & Young's real estate advisory services. "The baby boomer generation will continue to retire in large numbers in the next coming years and they will have a substantial amount of disposable income available to them. Many of these individuals are looking for opportunities to purchase second homes that they can use either for vacation or retirement purposes, and as such Latin America will continue to be an attractive proposition."
Apart from the real estate brokers, title insurance companies like First American are also seeing strong growth. "We issued more than twice as many title insurance policies in 2006 compared to 2005 and the insured amount tripled in value," says Turalu Brady Murdock, vice president at U.S.-based First American Title Insurance Company.
BETTER THAN U.S.
Basso expects a reduced rate of appreciation in second-home prices in the year ahead relative to 2006, but it should still be superior to the United States, thereby attracting baby boomers wishing to make investments in second homes in Latin America. "Though we should also anticipate a slow down in sales pace, this will be short lived, and will mostly impact the upper-end of the market," he says.
In general, there will continue to be a high level of interest for highly-amenitized, branded, beach-front developments, according to Basso.
Mexico and Costa Rica are expected to be the main drivers behind the growth, due to its proximity to the United States, Basso says. "Given that a substantial amount of demand in the second-home market is driven by US buyers, there should be continued interest in coastal locations within proximity to the US," he says. "Mexico and Costa Rica should continue to be in the real estate forefront, along with other markets in the Caribbean such as Bahamas and the Turks and Caicos. South America has yet to explode as a vibrant real estate market as a result of its distance to the main source market, the US." Mexico is the top Latin American market for First American, according to Murdock.
PANAMA AND NICARAGUA
In Central America, Panama, Guatemala and Nicaragua are seeing increased real estate activity, Basso points out. "However, the volumes are still relatively small to make them significant players in the region," he says. Nicaragua and Panama are the two fastest-growing markets in Latin America outside of Mexico for First American.
In the Caribbean, the Dominican Republic is developing several projects that are anchored by upscale lodging brands (Westin Rokoki and Cap Cana), and is a place to watch, according to Basso.
The northeast coast of Brazil (Bahia, Pernambuco), which features some of the most beautiful beaches in South America, has seen an increased level of interest from Spanish and Portuguese developers to develop mixed-use projects, mainly focusing on a European-based buyer.
Murdock expects Brazil, along with Nicaragua and Panama, to account for her company's strongest growth in the region this year.
Destinations that do not offer convenient access to the United States, both in terms of availability of flights and flight length, will not expand their secondary real estate markets, he warns. Countries that already lack a vibrant second home market to begin with - for example Ecuador and Bolivia - will be affected by the slowdown in the United States and increasing competition elsewhere, he adds.
DECREASED PRICE AND SALES GROWTH
Overall, he doesn't expect any declines in the top markets, but a decrease in appreciation rate and sales pace.
"Given the significant appreciation in land prices in the past three years, profit margins are reducing," Basso says. "Buying land now is significantly more expensive than before...As such, the same project that made sense five years ago may not pencil out today."
Meanwhile, the development quality is also changing. "Developers are being forced to offer highly-amenitized branded projects to differentiate themselves from the competition," Basso says. "Although there are significant benefits to this strategy (marketing, quality of finishes, awareness, etc) it also increases development costs. Projects that do not feature these characteristics will be at a disadvantage."
© Copyright Latin Business Chronicle
US baby boomers and European investors are helping spur the market. But growth and prices are slowing down.
BY CHRONICLE STAFF
Despite growing political tension in some countries, the real estate sector in Latin America continues to see strong growth.
"The fundamentals of the region continue to be sound, despite some concern on the potential collateral effect of the slowdown in the U.S. real estate market in other regions of the globe," says Rogerio Basso, an analyst at Ernst & Young's real estate advisory services. "The baby boomer generation will continue to retire in large numbers in the next coming years and they will have a substantial amount of disposable income available to them. Many of these individuals are looking for opportunities to purchase second homes that they can use either for vacation or retirement purposes, and as such Latin America will continue to be an attractive proposition."
Apart from the real estate brokers, title insurance companies like First American are also seeing strong growth. "We issued more than twice as many title insurance policies in 2006 compared to 2005 and the insured amount tripled in value," says Turalu Brady Murdock, vice president at U.S.-based First American Title Insurance Company.
BETTER THAN U.S.
Basso expects a reduced rate of appreciation in second-home prices in the year ahead relative to 2006, but it should still be superior to the United States, thereby attracting baby boomers wishing to make investments in second homes in Latin America. "Though we should also anticipate a slow down in sales pace, this will be short lived, and will mostly impact the upper-end of the market," he says.
In general, there will continue to be a high level of interest for highly-amenitized, branded, beach-front developments, according to Basso.
Mexico and Costa Rica are expected to be the main drivers behind the growth, due to its proximity to the United States, Basso says. "Given that a substantial amount of demand in the second-home market is driven by US buyers, there should be continued interest in coastal locations within proximity to the US," he says. "Mexico and Costa Rica should continue to be in the real estate forefront, along with other markets in the Caribbean such as Bahamas and the Turks and Caicos. South America has yet to explode as a vibrant real estate market as a result of its distance to the main source market, the US." Mexico is the top Latin American market for First American, according to Murdock.
PANAMA AND NICARAGUA
In Central America, Panama, Guatemala and Nicaragua are seeing increased real estate activity, Basso points out. "However, the volumes are still relatively small to make them significant players in the region," he says. Nicaragua and Panama are the two fastest-growing markets in Latin America outside of Mexico for First American.
In the Caribbean, the Dominican Republic is developing several projects that are anchored by upscale lodging brands (Westin Rokoki and Cap Cana), and is a place to watch, according to Basso.
The northeast coast of Brazil (Bahia, Pernambuco), which features some of the most beautiful beaches in South America, has seen an increased level of interest from Spanish and Portuguese developers to develop mixed-use projects, mainly focusing on a European-based buyer.
Murdock expects Brazil, along with Nicaragua and Panama, to account for her company's strongest growth in the region this year.
Destinations that do not offer convenient access to the United States, both in terms of availability of flights and flight length, will not expand their secondary real estate markets, he warns. Countries that already lack a vibrant second home market to begin with - for example Ecuador and Bolivia - will be affected by the slowdown in the United States and increasing competition elsewhere, he adds.
DECREASED PRICE AND SALES GROWTH
Overall, he doesn't expect any declines in the top markets, but a decrease in appreciation rate and sales pace.
"Given the significant appreciation in land prices in the past three years, profit margins are reducing," Basso says. "Buying land now is significantly more expensive than before...As such, the same project that made sense five years ago may not pencil out today."
Meanwhile, the development quality is also changing. "Developers are being forced to offer highly-amenitized branded projects to differentiate themselves from the competition," Basso says. "Although there are significant benefits to this strategy (marketing, quality of finishes, awareness, etc) it also increases development costs. Projects that do not feature these characteristics will be at a disadvantage."
© Copyright Latin Business Chronicle
Friday, January 5, 2007
Panama on the rise - Construction, global interest booming, eclipsing long-range worries
Panama on the rise
Construction, global interest booming, eclipsing long-range worries
By Indira A.R. Lakshmanan, Globe Staff | December 27, 2006
PANAMA CITY -- Long a freewheeling shipping hub and offshore banking center for the Americas, Panama is enjoying a building boom on a scale unmatched since the construction of its famous canal 92 years ago.
The country is luring investors and expatriates worldwide, with interest further boosted by the recent approval of a $5.2 billion plan that will double the canal's capacity.
A real estate frenzy fueled by easy credit from Panamanian banks, government incentives, and a saturated US housing market for retirees has attracted speculators and prospective residents from California to Dubai. They are snapping up preconstruction bay-front apartments, highland villas, and the latest luxury development from Donald Trump -- a $220 million residential, office, and hotel complex called Trump Ocean Club, with towers shaped like a yacht sail. Two rival Spanish projects are vying to build the tallest skyscraper in Latin America at about 100 stories.
Construction moguls and estate agents say Panama City is a sure bet for investors, offering discount prices for quality of life and healthcare rivaling the United States', more than 100 international banks, tax breaks, and stunning Atlantic and Pacific coastlines.
But urban planners and long time residents warn that overbuilding could ultimately strain the country's roads, water supply, and other infrastructure to the breaking point with devastating consequences.
Almost no one seems to be heeding those alarms.
Cranes, building sites, glitzy sales offices, and real estate package tours aimed at foreigners are everywhere, from Avenida Balboa in downtown Panama City to suburban Punta del Este. Laundered drug money from neighboring Colombia built some of the early mirrored high-rises in the 1980s, but today's buyers include fixed- income senior citizens from the United States searching for a less expensive place to retire as well as billionaires from Monaco and Cannes.
David Btesh, a partner in Pacific Point, a high-end condominium project under construction on a landfill in downtown Panama City with units ranging from $300,000 to $1.1 million, said foreigners are looking for a haven from a world they perceive as unsafe because of crime at home and global terrorism.
"They're not going to Europe because it's too expensive, Canada's too cold, and Mexico's only Spanish-speaking," while many Panamanians speak English, Btesh said.
"Panama is a dollar economy with a democratic government. There's every kind of food, a modern airport with about 54 flights a day, and the second-largest free-trade zone in the world after Hong Kong," he said.
US citizens represent two-thirds of foreign resident visas issued in Panama in recent years, officials say, with at least 1,379 Americans moving to the country since 2003. Celebrities from Mick Jagger to Bono reportedly have purchased property in resort areas outside the capital.
The canal, central to the country's history, also looms large in the current boom.
The United States supported Panama's declaration of independence from Colombia in 1903 in exchange for US control of a canal connecting the Atlantic and Pacific oceans. In 1914, the US-built canal was completed, and the zone remained under US control until 2000.
In October, a majority of Panamanians voted to finance the construction of a third canal lock over the next decade that will allow the 50-mile lock and lake system to accommodate bigger ships and double toll revenues within 20 years, according to government estimates. Ricuarte Vásquez, minister for canal affairs, said the referendum "is a vote of confidence" in the local administration of the canal that has raised interest in Panama as an investment destination.
About 107 residential building projects of at least 20 stories, valued at $3.2 billion, are under construction in metropolitan Panama City, according a survey by Prima Panama, a real estate promotion company. That construction activity accounted for one-fifth of Panama's annual gross domestic product.
The report also found that about 11,000 apartments are scheduled for completion within four years -- the same number that were built over the past 11 years in metropolitan Miami, by comparison, where a glut has softened the market. The survey found that the average price of a new condo in Panama City is $289,111.
The cost has raised concerns about who will be able to afford to live in Panama.
Some will be the jet-set buyers targeted by the Trump complex, which is selling preconstruction condos from $400,000 to $8.7 million. The K Group, local developers of the project, says Americans including Trump, top the list of buyers at about 40 percent, followed by Canadians, Europeans, and Latin Americans.
Other buyers are expected to be baby boomers from the United States seeking more value for their retirement money. Modern Maturity magazine ranked the town of Boquete, in Panama's highlands, as one of the world's top retirement destinations.
Kit Marchel, a 35-year-old real estate investor, said she sold her Los Angeles condo last year for $3.3 million and bought an 8,000-square-foot villa at a southern Panama beach for $335,000. Since then, she has acquired 17 properties in resort areas and the capital, with plans to resell, rent, or redevelop them.
"The communications work, you can drink the water from the tap, there's no currency exchange issue, and it feels a lot like home," she said. "I've made a commitment to this country. . . . I did my research first. There's one baby boomer retiring every six seconds -- add those numbers up."
But a question nagging even the bullish is whether public services and demand can keep up with rising supply and prices. Already the capital suffers from traffic jams and fumes from untreated sewage that is dumped into Panama Bay. Public transport is sorely lacking, and the water supply is insufficient in poor neighborhoods.
"It's a time bomb -- you cannot meet the demand of all these high-rises with the infrastructure that exists," said urban planner Jorge Ricardo Riba, a former top official with the National Planning Office. "What happens when people start to live there?"
If the US economy weakens, he said, "there may not be enough buyers. I see a lot of empty apartments in the future."
Sandra Snyder, an American relocation consultant in Panama City who has written two books about expatriate life in Panama, also worries that the country's infrastructure cannot keep up with the pace of building. "This is such a lovely place, and I hate to see what's happening with this frenzy of building," she said.
A few developers say they are looking beyond the quick buck and want national and local officials to forestall problems before they arise.
José Bern of Empresas Bern, a hotel and real estate giant, said his biggest problem is finding workers to complete his projects on time and within budget. Panama City "is experiencing some growing pains, and it will get worse before it gets better," he said. "But maybe that's good, to slow things down."
Sarah Cox, a consultant with International Living, a publishing and seminar company, says the government has promised a new bridge, a wider main artery, a revamped bus system, a waste-water treatment plant, and a cleanup of the bay.
Cox acknowledges that speculation and overbuilding could bring down Latin America's new boomtown. But for now, she said, "I don't see that they'll stop building until people stop buying. . . . It's like picking up dimes in front of a steamroller. As long as you can stay ahead of the steamroller, you're fine."
Construction, global interest booming, eclipsing long-range worries
By Indira A.R. Lakshmanan, Globe Staff | December 27, 2006
PANAMA CITY -- Long a freewheeling shipping hub and offshore banking center for the Americas, Panama is enjoying a building boom on a scale unmatched since the construction of its famous canal 92 years ago.
The country is luring investors and expatriates worldwide, with interest further boosted by the recent approval of a $5.2 billion plan that will double the canal's capacity.
A real estate frenzy fueled by easy credit from Panamanian banks, government incentives, and a saturated US housing market for retirees has attracted speculators and prospective residents from California to Dubai. They are snapping up preconstruction bay-front apartments, highland villas, and the latest luxury development from Donald Trump -- a $220 million residential, office, and hotel complex called Trump Ocean Club, with towers shaped like a yacht sail. Two rival Spanish projects are vying to build the tallest skyscraper in Latin America at about 100 stories.
Construction moguls and estate agents say Panama City is a sure bet for investors, offering discount prices for quality of life and healthcare rivaling the United States', more than 100 international banks, tax breaks, and stunning Atlantic and Pacific coastlines.
But urban planners and long time residents warn that overbuilding could ultimately strain the country's roads, water supply, and other infrastructure to the breaking point with devastating consequences.
Almost no one seems to be heeding those alarms.
Cranes, building sites, glitzy sales offices, and real estate package tours aimed at foreigners are everywhere, from Avenida Balboa in downtown Panama City to suburban Punta del Este. Laundered drug money from neighboring Colombia built some of the early mirrored high-rises in the 1980s, but today's buyers include fixed- income senior citizens from the United States searching for a less expensive place to retire as well as billionaires from Monaco and Cannes.
David Btesh, a partner in Pacific Point, a high-end condominium project under construction on a landfill in downtown Panama City with units ranging from $300,000 to $1.1 million, said foreigners are looking for a haven from a world they perceive as unsafe because of crime at home and global terrorism.
"They're not going to Europe because it's too expensive, Canada's too cold, and Mexico's only Spanish-speaking," while many Panamanians speak English, Btesh said.
"Panama is a dollar economy with a democratic government. There's every kind of food, a modern airport with about 54 flights a day, and the second-largest free-trade zone in the world after Hong Kong," he said.
US citizens represent two-thirds of foreign resident visas issued in Panama in recent years, officials say, with at least 1,379 Americans moving to the country since 2003. Celebrities from Mick Jagger to Bono reportedly have purchased property in resort areas outside the capital.
The canal, central to the country's history, also looms large in the current boom.
The United States supported Panama's declaration of independence from Colombia in 1903 in exchange for US control of a canal connecting the Atlantic and Pacific oceans. In 1914, the US-built canal was completed, and the zone remained under US control until 2000.
In October, a majority of Panamanians voted to finance the construction of a third canal lock over the next decade that will allow the 50-mile lock and lake system to accommodate bigger ships and double toll revenues within 20 years, according to government estimates. Ricuarte Vásquez, minister for canal affairs, said the referendum "is a vote of confidence" in the local administration of the canal that has raised interest in Panama as an investment destination.
About 107 residential building projects of at least 20 stories, valued at $3.2 billion, are under construction in metropolitan Panama City, according a survey by Prima Panama, a real estate promotion company. That construction activity accounted for one-fifth of Panama's annual gross domestic product.
The report also found that about 11,000 apartments are scheduled for completion within four years -- the same number that were built over the past 11 years in metropolitan Miami, by comparison, where a glut has softened the market. The survey found that the average price of a new condo in Panama City is $289,111.
The cost has raised concerns about who will be able to afford to live in Panama.
Some will be the jet-set buyers targeted by the Trump complex, which is selling preconstruction condos from $400,000 to $8.7 million. The K Group, local developers of the project, says Americans including Trump, top the list of buyers at about 40 percent, followed by Canadians, Europeans, and Latin Americans.
Other buyers are expected to be baby boomers from the United States seeking more value for their retirement money. Modern Maturity magazine ranked the town of Boquete, in Panama's highlands, as one of the world's top retirement destinations.
Kit Marchel, a 35-year-old real estate investor, said she sold her Los Angeles condo last year for $3.3 million and bought an 8,000-square-foot villa at a southern Panama beach for $335,000. Since then, she has acquired 17 properties in resort areas and the capital, with plans to resell, rent, or redevelop them.
"The communications work, you can drink the water from the tap, there's no currency exchange issue, and it feels a lot like home," she said. "I've made a commitment to this country. . . . I did my research first. There's one baby boomer retiring every six seconds -- add those numbers up."
But a question nagging even the bullish is whether public services and demand can keep up with rising supply and prices. Already the capital suffers from traffic jams and fumes from untreated sewage that is dumped into Panama Bay. Public transport is sorely lacking, and the water supply is insufficient in poor neighborhoods.
"It's a time bomb -- you cannot meet the demand of all these high-rises with the infrastructure that exists," said urban planner Jorge Ricardo Riba, a former top official with the National Planning Office. "What happens when people start to live there?"
If the US economy weakens, he said, "there may not be enough buyers. I see a lot of empty apartments in the future."
Sandra Snyder, an American relocation consultant in Panama City who has written two books about expatriate life in Panama, also worries that the country's infrastructure cannot keep up with the pace of building. "This is such a lovely place, and I hate to see what's happening with this frenzy of building," she said.
A few developers say they are looking beyond the quick buck and want national and local officials to forestall problems before they arise.
José Bern of Empresas Bern, a hotel and real estate giant, said his biggest problem is finding workers to complete his projects on time and within budget. Panama City "is experiencing some growing pains, and it will get worse before it gets better," he said. "But maybe that's good, to slow things down."
Sarah Cox, a consultant with International Living, a publishing and seminar company, says the government has promised a new bridge, a wider main artery, a revamped bus system, a waste-water treatment plant, and a cleanup of the bay.
Cox acknowledges that speculation and overbuilding could bring down Latin America's new boomtown. But for now, she said, "I don't see that they'll stop building until people stop buying. . . . It's like picking up dimes in front of a steamroller. As long as you can stay ahead of the steamroller, you're fine."
Tuesday, January 2, 2007
Nikki Beach is Coming to Panama’s Playa Blanca and the Amador Causeway
The coming year is looking good for recent investments in Panama’s real estate and tourism industries. Soon, Panama will boast an even greater number of exclusive clubs, restaurants, and luxury hotels.
A key player in the impressive growth of Panama real estate is the recently arrived Nikki Beach. Nikki Beach, created by Michael Penrod, is one of the trendiest beach clubs in Miami, frequented by celebrities and models. Nikki Beach possesses facilities in Miami and Hollywood in Florida, New York City, Saint Bartholomy in the Caribbean, Cabo San Lucas and Puerto Vallarta in Mexico, Marbella in Spain, Sardinia and Saint Tropez in the Mediterranean, in Morroco, and now, in Panama. Two hotel projects will be constructed and will operate under the brand Nikki Beach, one in Playa Blanca and the other at the Amador Causeway.
Michael Penrod, the international representative of Nikki Beach, was in Panama the first week of December to attend the launch of Destiny Real Estate Sales & Marketing. At the launch party, Destiny Real Estate & Sales presented three real estate developments to be constructed in 2007, which will be primarily promoted to the United States market. The three real estate developments represent a combined investment of 110 million dollars.
The project Casa Grande Luxury Beach Community involves a total investment of 60 million dollars over its three stages. The project, administrated by Nikki Beach International, will be located in Playa Blanca and possess a Polynesian style residential community, including a 100-room condo hotel and resort. Construction will commence in January 2007 and the first phase is scheduled for completion in December 2007.
Nikki Beach will construct the Panama Canal Hotel & Spa on the Amador Causeway, between the Yatch Club and the soon-to-be Ghery Museum. Approximately 30 million dollars will be invested in the Panama Canal Hotel & Spa, and construction will begin mid-2007.
The arrival of Nikki Beach may attract a new crowd to Panama. Traditionally, Panama has been an attractive destination for retirees, baby boomers and snowbirds. However, the concept of Nikki Beach is quite distinct from these other groups. Nikki Beach is focused towards an exclusive market: People over 30 with purchasing power that want to have a good time in an exotic, unique environment.
Nikki Beach is exclusive property of Michael Penrod and his family, though at some of their clubs and hotels they do maintain strategic alliances with local investors. Also, they own their own magazine, music division, clothing line and television station.
How did Nikki Beach arrive in Panama? Raul Almeida, Puerto Vallarta’s Nikki Beach representative, reveals that they were in search of new markets when they met Rugiere Galvez, president of Destiny Real Estate, who proposed the ideal. After they visited Panama, the rest was a matter of sorting out the details.
Panama could be the new destination for this exclusive market of “jet setters.” Almeida, stressing the positive economic impact that these projects have on a region’s tourism industry, spoke about the group of individuals that travel to other countries for a weekend’s entertainment, and that Panama could soon become a hit destination for this distinct crowd.
Penrod, who spent his entire visit signing contracts with 5 new hotels that will operate under Nikki Beach, added that they plan to offer a place where tourists and personalities can come during the winter to have a good time.
Pendrod has seen in Panama an “international environment” and believes that Nikki Beach will complement those characteristics. His aspiration is to make “something big” in Panama, such as celebratory parties for film or fashion festivals, such as those in Cannes and Venice.
The above information was extracted from La Prensa.
A key player in the impressive growth of Panama real estate is the recently arrived Nikki Beach. Nikki Beach, created by Michael Penrod, is one of the trendiest beach clubs in Miami, frequented by celebrities and models. Nikki Beach possesses facilities in Miami and Hollywood in Florida, New York City, Saint Bartholomy in the Caribbean, Cabo San Lucas and Puerto Vallarta in Mexico, Marbella in Spain, Sardinia and Saint Tropez in the Mediterranean, in Morroco, and now, in Panama. Two hotel projects will be constructed and will operate under the brand Nikki Beach, one in Playa Blanca and the other at the Amador Causeway.
Michael Penrod, the international representative of Nikki Beach, was in Panama the first week of December to attend the launch of Destiny Real Estate Sales & Marketing. At the launch party, Destiny Real Estate & Sales presented three real estate developments to be constructed in 2007, which will be primarily promoted to the United States market. The three real estate developments represent a combined investment of 110 million dollars.
The project Casa Grande Luxury Beach Community involves a total investment of 60 million dollars over its three stages. The project, administrated by Nikki Beach International, will be located in Playa Blanca and possess a Polynesian style residential community, including a 100-room condo hotel and resort. Construction will commence in January 2007 and the first phase is scheduled for completion in December 2007.
Nikki Beach will construct the Panama Canal Hotel & Spa on the Amador Causeway, between the Yatch Club and the soon-to-be Ghery Museum. Approximately 30 million dollars will be invested in the Panama Canal Hotel & Spa, and construction will begin mid-2007.
The arrival of Nikki Beach may attract a new crowd to Panama. Traditionally, Panama has been an attractive destination for retirees, baby boomers and snowbirds. However, the concept of Nikki Beach is quite distinct from these other groups. Nikki Beach is focused towards an exclusive market: People over 30 with purchasing power that want to have a good time in an exotic, unique environment.
Nikki Beach is exclusive property of Michael Penrod and his family, though at some of their clubs and hotels they do maintain strategic alliances with local investors. Also, they own their own magazine, music division, clothing line and television station.
How did Nikki Beach arrive in Panama? Raul Almeida, Puerto Vallarta’s Nikki Beach representative, reveals that they were in search of new markets when they met Rugiere Galvez, president of Destiny Real Estate, who proposed the ideal. After they visited Panama, the rest was a matter of sorting out the details.
Panama could be the new destination for this exclusive market of “jet setters.” Almeida, stressing the positive economic impact that these projects have on a region’s tourism industry, spoke about the group of individuals that travel to other countries for a weekend’s entertainment, and that Panama could soon become a hit destination for this distinct crowd.
Penrod, who spent his entire visit signing contracts with 5 new hotels that will operate under Nikki Beach, added that they plan to offer a place where tourists and personalities can come during the winter to have a good time.
Pendrod has seen in Panama an “international environment” and believes that Nikki Beach will complement those characteristics. His aspiration is to make “something big” in Panama, such as celebratory parties for film or fashion festivals, such as those in Cannes and Venice.
The above information was extracted from La Prensa.
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