Real Estate Report for March 2012
Rounding out a steady Q1
For the first three months of 2012, we’ve seen strong demand for rental units in the city and an uptick in demand for the beach areas of Coronado and Gorgona. Absorption on the rental side has been good along Balboa Avenue in buildings such as Bayfront, Grandbay and H20 on fully furnished one and two bedroom apartment rentals.
Overall, selling/listing prices have held steady in the neighborhoods we continue to track including Balboa Avenue and Punta Pacifica. We understand that hotel occupancy has been hovering in the 60-70% range which is pretty good, due in part to the Ironman event (which marked the return of Lance Armstrong to the racing circuit) and the Herbalife convention in the last two months. The Panamanian “high season” for tourists generally extends through April (coinciding with the dry season). Hotel owners are looking to capitalize on a handful of large events including the Macrofest, Expocomer and the IFF Panama which are all coming up in the next few months.
Developer price are showing decent inventory absorption, specifically in the projects we are tracking: Allure, Rivage, Panama Pacifico, Andromeda and Bern’s Playa Bonita project. Days on market for our well priced in-house listings are generally coming in at around 45-60 days and competitively priced rental units are being absorbed much faster, with an average of around 15 days or less on the market.
An International Film Festival is Born
More good exposure for Panama
We are pleased to announce the official dates for the 2012 Panama International Film Festival being held in the city from April 26th to May 2nd. The planners are expecting over 60,000 visitors to come to Panama for this event, including members of the Latin American film industry, film students, and movie fans from all over the world. Panama Equity Real Estate is doing as much as we can to get the word out about this fantastic, world class event and will be co-hosting several pre-screening cocktails and related events around town leading up to and during the festival.
We were fortunate enough to be invited to last week’s red carpet gala opening and the energy was electric! The event was well attended by the press and local art patrons, alongside some powerful Panamanian industry heads and government figures. All agree that Panama is ready for this type of event, and are eagerly anticipating the April date as it will add a desperately needed facet to Panama’s artistic and cultural movement.
This is a very big deal for Panama and from what we’ve seen so far, it has the potential to be a roaring success. The founder of the event, Henk Van Der Kolk is the mastermind of the Toronto Film Festival which is one of the largest film festivals in the world. He moved to Panama several years ago and had the vision to start a similar event in Panama. After years of courting the Panamanian government, Henks’ dream will become a reality once again, this time in Panama! His Toronto film festival was founded in 1976, and last year 339 films from 59 countries were screened at 32 screens in downtown Toronto venues. Over the last several years, total attendance at the Toronto IFF has exceeded 260,000 visitors.
The Panama International Film Festival will bring visitors from all over the world to participate in workshops, conferences, and of course watch movies, some of which have already won acclaim in Cannes, Sundance, and other film festivals around the world. The list of movies, 50 in total, mostly come from Latin American directors and all of the films will be offered with English Subtitles. The venues will be the National Theatre and MultiCentro’s Cinemark locations, with the possibility of additional venues added later.
If you are interested in volunteering or becoming a sponsor for the event, please send me an email to Kent@panamaequity.com.
The Agricultural Sector Update
Panama Export Problems and Opportunities
It’s widely acknolwedged that Panama is losing its agricultural base at a rapid rate as many farms go out of production every year. Urban sprawl and rural non-farm development are contributing to the annual loss of thousands of acres of farmland and in the last 10 years, over 200,000 acres have been taken out of production. Poor leadership at both a national and local level, poor capitalization, and an antiquated distribution system have compounded the problems for local producers, many of whom are selling out to developers and investors for pennies on the dollar. Furthering problems for the local producer, this past year the US-Panama free trade agreement was passed, which many in the farming industry saw as a threat because it opens the doors to US producers bringing in such products as lower priced beef and corn, both heavily subsidized industries in the US.
Panama’s soil is fertile and there are a handful of recent success stories in the farming industry. This past month, the first container of Diamond Box brand yams were shipped to Miami via the San Juan SA export agency, the first of a shipment which is planned at one per week to the US market. Pineapples and bananas round out Panama’s top four exports (on the list with gold and shrimp) and increased European demand has been a boon for companies like Tropical Queen, whose branded pineapples have seen explosive growth over the last 12 months. In our personal opinion, Panama’s pineapples — when in season — are among the best in the world.
With this hardship comes an opportunity. Given an expanding world population, food production continues to gain importance on a global scale and few countries are positioned better than Panama from a getting-goods-to market standpoint. The new cold chain (refrigerated warehouse grid) distribution network is a national priority, and the first steps have already been taken to roll out this countrywide supply chain upgrade. Once the cold chain network is online, added to Panama’s overall infrastructure overhaul, the well capitalized Panamanian farmer will be in a position to shorten the time to market and access new global markets via the (newly expanded)Panama Canal and an improved national distribution chain. Both should be fully operational by 2014.
As farmland supply goes down, prices will inevitably go up on fertile, producing farmland and we believe this market sector has tremendous opportunity. Food imports are twice that of domestic production on products like corn and rice. As the local farmer gets squeezed out of business by increased competition or fails to upgrade their machinery and farming techniques, many will be forced to liquidate their land. If you are an experienced agricultural investor, some of the opportunities in Panama are striking: just let us know what you’re looking for and we’ll open up our inventory.
Pearl Islands Project in full swing
After four years of infrastructure and improvements
The Pearl Islands, long known by Panama’s fishing and boating community, is now home to one of the most stunning oceanfront projects we’ve seen in a long time.
The project has been in construction for the last four years, and the developer, instead of putting money into glitzy marketing documents, decided to focus 100% of the investment into underground and above ground infrastructure, thus laying the groundwork for what is shaping up to be a very impressive development.
The homes are absolutely stunning, there are plans for a 120 room hotel, three is already a small marina and airstrip and coincidentally this very same island is where the Trump Ocean Club will have their Ocean Club! The crystal clear MORE OF THE PEARL ISLANDS HERE
Local Business Spotlight
The Least Expensive way to get a Visa in Panama
Thinking about getting you and your family residency that leads to Panamanian citizenship? Want to get out of the depreciating dollar and into hard commodities? The Golden Forestry Program costs the same as you’d see with other forestry programs however, we have the connection that will get you $28,000 in PHYSICAL GOLD as a rebate upon closing!
Thats right, you walk away with residency, a generous amount of valuable teak and about a POUND of gold delivered here in Panama! You can do whatever you want with the gold – store it, sell it, bury it! Its up to you!
If you’re interested, shoot me a line and I’ll put you in touch with Bob.
Thanks for your business! We believe that real estate is 24/7 and if you have a question, you know how to find us.
If you like the information in this newsletter, by all means pass it on to anyone who might benefit from the research we do every month to put it together.