Real estate sector seeks to expand options
March 30, 2009
La Estrella de Panamá
PANAMA: As Panama faces a decline in the demand for luxury property, representatives from the real estate sector are seeking out new potential clients. The President of the Panama Realtors Association, Osvaldo Marchena, says the key lies in Panama’s position as a logistic hub. He proposes taking advantage of this by focusing sales efforts on multinational companies. Says Marchena, this could mitigate what he calls a “temporary decline” in the demand for residences built for the foreign market.
Per Marchena, there are a number of large multinational corporations that are interested in investing in Central America and that need a strategic location in the region. This translates to an opportunity for Panama, as it boasts quality infrastructure, technology, and telecommunications networks. Marchena also insists that the country is prepared to respond to an immediate need for housing and office space, should more multinationals choose to set up offices here and relocate high-ranking executives.
“When a company says ‘we’re going to Panama,’ its executives need a place to live…they can't wait four years for us to erect a new building,” says Marchena. He adds that in Singapore alone there are more than 5,000 businesses that fall into the multinational category, while there are 60,000 such corporations around the globe.
Many multinationals have already been drawn to Panama Pacifico’s Special Economic Zone (known as the Área Económica Especial Panamá Pacífico, or the AEEPP). Multinationals operating in the AEEPP include Dell, which has a call center here, as well as River Latinoamerica Industrial, I.P. Leather Corp., Singapore’s Aerospace Engineering, and ACCEL. Furthermore, Caterpillar and Proctor & Gamble have decided to move their regional headquarters here; 3M will also move to Panama Pacifico, though it has yet to set a date. Meanwhile, even credit agencies like Banco Latinoamericano de Reexportaciones (Latin American Re-Exporting Bank) have headquarters in Panama.
The construction sector has a different take on the situation, however. The President of the Panama Builders Association, Jaime Jovane, suggests that Panama deal with the decline in demand for high-cost property by making big investments in infrastructure.
Panama real estate sector says multinationals are the key
Data
- According to the National Comptroller’s Office, residential projects dropped 31.2% in January, particularly in the districts of Panama and San Miguelito.
- Multinationals like Dell, Aerospace Engineering, ACCEL, and Caterpillar have set up offices in Panama Pacifico.