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International Investors Flock to Panama
International Herald Tribune, June 2nd 2006
Arriving individually or on real estate tours, international investors are buying into one of the hottest real estate markets in the hemisphere. Aging North American baby boomers are in the majority, but a growing number of Europeans are developing projects or acquiring properties.
Linking the Americas and narrowly dividing the Atlantic and Pacific Oceans, Panama has long been an international crossroad for travelers and traders, fauna, flora and gold. Simón Bolívar once said that if the world had to select a capital, Panama would be the obvious choice.
Today, its free-trade zone is surpassed in volume only by Hong Kong; its international banking center has more than 100 banks representing more than 30 countries. The A.T. Kearney/Foreign Policy Magazine Globalization Index last year ranked Panama first in Latin America and 24th in the world, up three slots from 2004, based such factors as trade and investment flows and Internet use.
Traffic and tonnage through the Panama Canal have increased since the United States turned it over to Panama in 1999, but new mega-ships are too large for the 1914 locks. Last month the government announced a $5.25 billion expansion plan; if it is approved by referendum and constructed, capacity would almost double.
Construction in this country of 3.2 million people is booming. The capital's skyline already is a forest of dramatic skyscrapers. Building permits jumped 91 percent last year with new projects announced almost daily.
According to Emporis.com, a site that tracks international data, Panama City has 121 completed high-rises, which it defines as buildings of 12 or more stories. More than 100 similar buildings are under construction, 21 are approved and 12 are proposed.
Two projects still being planned - Ice Tower and Palacio de la Bahía - are battling to become the tallest in Latin America. Palacio de la Bahía, being developed by the Olloqui Group of Spain, announced 78 floors; the Ice Tower, 104. Palacio de la Bahía now plans 97. Pre-construction prices in such condos begin above $200,000, with top-floor apartments, which are likely to have views of both oceans, costing about $1.5 million.
Another Spanish-backed project, the massive $400-million Faros de Panamá, was announced earlier this year by Grupo Mail. Each of its three towers will top out somewhere between 85 and 95 floors; it will include a commercial center, 1,000 condominiums and a 200-room hotel.
Actually, so much Spanish investment is coming into the country that a local joke describes Spaniards saying: "We colonized you once. Now we will colonize you again."
Other Europeans also have high- end developments. A French designer is building Azueros, luxury beachfront villas on the Azuero Peninsula. Another Frenchman with investors from Luxembourg has begun developing Isla Viveros in the Pearl Islands, 64 kilometers, or 40 miles, southeast of Panama City. And near Boquete, a British builder, bored with retirement in the Caymans, has broken ground for Montañas de Caldera.
Sean Hennessy, 40, an Irishman who is creating a boutique hotel in Casco Viejo, will commute to Japan every month or so to his job as photo director of a large photo production company. "With good Internet access I can work from anywhere, as everything is digital these days," he said. He already has commuted from southern Spain and from Dublin while renovating properties.
Hennessy said he considered South Africa and Corsica but liked Panama's "Latin vibe" and its potential. "Panama is at the beginning of a property boom," he said, a view supported by a recent Credit Suisse report predicting real growth there of 6 to 7 percent in 2006 and 2007 and a surge in residential construction.
Europeans taking advantage of Panama's retirement incentives, like health service discounts, are not deterred by long flights. Werner and Heidi Kaech look forward to playing golf year-round on the championship course at Cielo Paraiso, a gated community built by Canadians near Boquete, but they want the best of Europe, too. "We will keep our condo in Lucerne as our summer residence," said Werner, a Swiss banker who enjoys concerts in Lucern and opera in Zurich, Munich and Milan.
What often goes unsaid is that it is easier for foreigners to enter Panama than the United States, especially since 9/11. Felix Carles, a Panamanian broker, likes to point out that Panama offers everything Florida does, but without the airport security hassles or the hurricanes and is only a couple hours farther away by air.
Source:
International Herald Tribune
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