Panama Real Estate Investment

Chevron is planning on doubling the capacity of its Las Minas facility in Panama to nearly 4 million barrels.  This increase in capacity is to meet the rising demand for fuel in Central America, and for ships passing through the Panama Canal.  The Las Minas facility is located near Colon, Panama, and provides fuel, derivatives, and lubricants to vessels stopping at nearby ports.  Chevron, a US based petroleum company has already invested $13 million in the Panama facility, and following this short term increase in capacity is expected to continue expanding the facility.

Source:
Chevron To Up Bunker Capacity In Panama (Reuters.com)

Overseas Property Mall, a well regarded international real estate investment blog, named Panama one of the top real estate markets for investors in Latin America. Other markets listed included Mexico, Brazil, Venezuela, and Argentina.

Panama was chosen as it recently has had continuously booked flights, overbooked hotel rooms, and a boom in condo development. In addition to this, the projected developments in the energy sector and expansion of the Panama Canal make Panama a good prospect for real estate investors. With 40,000 flats on the market in the next few years, Panama offers many opportunities for investors, making it one of the top Latin American real estate markets according to Overseas Property Mall.

Source:
Top Five Latin American Markets For Investors (Overseaspropertymall.com)

A recent article in NaturalNews listed several ways to avoid becoming a victim of a real estate scam in Central and South America. The author created a list based primarily on experiences purchasing land in Ecuador and Panama. Here are a few of the scams to look out for:

Resort Real Estate Broker Scam
In this scam the author describes a situation where you see a notice advertising property at the front desk of a resort or hotel. The real estate broker at the resort then tells you the price for property, which could potentially be increased by as much as $100,000 in excess of the price the property owner is actually asking. The author recommends hiring a good translator to insure that the property broker is not asking for an exorbitant fee.

After The Fact Zoning Changes
In this situation the property that you have bought from a developer was initially shown to be part of a 50 unit community, yet as time progresses the developer continues to subdivide the parcels of land surrounding yours. In this case you may have thought that the land adjacent to your property would remain untarnished, yet in reality it has become densely developed. To avoid this situation the author suggests signing an agreement with your developer to assure this doesn’t happen, and to make sure that you are well acquainted with any local zoning laws, or lack thereof.

Inaccurate Property Surveys
The author recommends either surveying any land you are considering purchasing yourself, or contracting your own surveyors to do it for you. It is not uncommon for land surveyors to be bribed by sellers to overestimate the size of a plot of land, and as a result buyers frequently end up with a parcel that is significantly smaller than the plot they paid for.

Hidden Liens
Titles can be extremely complicated in areas of South and Central America, and there have been situations where real estate brokers sell land that someone else already has a lien on. It can often be difficult for foreign investors to make sense of these laws, so the author recommends hiring a good bilingual lawyer to verify that the property being sold is legitimate. He also advises never to use lawyers hired by the real estate brokers themselves, as they are often part of the scam.

Those are the four major scams the article discusses. While it is impossible to completely avoid any risk of being a victim of a scam, taking steps such as hiring your own translators, lawyers and land surveyor’s can go a long way.

Source:

How To Avoid Real Estate Property Scams In Ecuador and Panama (NaturalNews.com)

Historic buildings are becoming increasingly difficult to find in Panama City, according to an article in The Panama Report. Many historic buildings are being torn down in favor of higher density condominiums, which lack the local character and charm of older buildings. In Neighborhoods such as San Francisco, Marbella, and Bella Vista, many of the existing French-Caribbean and Spanish architecture influenced buildings are being replaced with these high rise condominiums. Casco Viejo, as a UNESCO world heritage site, is one of the few neighborhoods protected by historic preservation laws. The article states that as a result, Panama has fallen behind other Latin American cities such as Cartagena, Colombia and Antigua, Guatemala in protecting local historic architecture.

Investing in historic buildings can help to protect the culture and character of Panama’s older neighborhoods

Despite the growth in new construction in Panama City, investing in historic buildings can be extremely rewarding for real estate investors. Historic architecture helps to retain the local characteristics of a neighborhood, which in an increasingly globalized and homogenous world add value to the real estate. In addition to this, restored historic buildings are attractive to tourists, which is a major force in Panama’s economy. As more historic buildings are demolished, the demand for these types of buildings will only increase, making investing in restored historic buildings a valuable strategy for long term investments. By investing in historic buildings investors can help to protect the culture and character of Panama’s older neighborhoods.

Antigua, Guatemala is an example of a city that has benefited through historical preservation (Photo courtesy of Wikipedia)

Source:

Panama Real Estate Losing Its Historic Appeal (Thepanamareport.com)

For more information on investing in rare houses internationally or domestically, check out this article in NuWire Investor: Rare Homes: Not Just Antiques And Custom-Built Mansions

Digicel Panama and Claro Panama were both awarded licenses by the government of Panama to create new cell phone networks in the country. Digicel’s $83 million bid beat out rival cellular provider Claro’s $73 million bid, which was raised at the request of Panama’s government to match Digicel’s bid for the license. The two new cell phone companies will double the options for consumers in Panama, joining the current Cable and Wireless and Movistar Panama. The new cell phone companies will increase the competitiveness of the market in Panama, and aim to fill the gap of the nearly 800,000 Panama residents without cellular phones. Digicel, which is owned by wealthy Irish businessman Denis O’Brien, is expected to have their operations running by the end of the year.

Source:

Panama sells Claro, Digicel mobile licenses (Reuters.com)

As I mentioned in a post last month, Panama City’s historic district, Casco Antiguo (also known as Casco Viejo), has become one of the hottest places to buy property in the city. I came across a nice site today that allows you to take a virtual tour of the Casco, and visit some of the landmarks of the area. The tour takes you to the magnificent Plaza Catedral, the stately Presidency, around Plaza Bolivar, and inside the Teatro Nacional. Arcos Property, a real estate brokerage that focuses on historic properties in Panama City, also has maps and photographs of the Casco on their site, including an interactive map that locates renovated properties in the area.

Casco Antiguo is a fascinating historic neighborhood, and internationally recognized by UNESCO as a world heritage site

In addition to the interactive tours and maps of Casco Antiguo, Arcos also publishes a Casco Viejo blog that discusses living in and around the Casco. The blog has interesting tidbits of information about the neighborhood, including links to some fantastic photographs. One post of particular interest to real estate investors details a few things potential buyers should consider before purchasing property in the Casco.

Casco Antiguo is a fascinating historic neighborhood, and internationally recognized by UNESCO as a world heritage site. For more information and a history of the area, be sure to check out their site.

An overhead view of Casco Antiguo (from Wikipedia)

Mr. Taliaferro’s Panama Investor Blog is one of the more established and trustworthy real estate investment blogs on Panama. The blog is updated daily with the latest news on politics, economics and business, as well as with updates on upcoming real estate development projects across the country. The author often paraphrases interesting articles from Spanish language newspapers, such as La Prensa, which can be very helpful for English speaking readers. His posts are informative, diverse, and a great resource for anyone interested in making a real estate investment in Panama.

According to his site, Sam Taliaferro is an American expatriate and real estate developer whose Valle Escondido was one of the earliest and most successful residential resort communities in Boquete, Panama. His development has attracted the likes of Sean Connery and Mel Gibson, whom he reportedly had the opportunity to play poker with.

The articles Mr. Taliaferro reviews are great resources on Panama investment news, and his site is one of the best out there for Panama real estate investors.

While many of the posts on the Panama Investor Blog are brief overviews of news articles, Mr. Taliferro’s breadth and experience tends to comes out the most in his opinion articles. Unsurprisingly (given the Mises Institute and Ayn Rand links on his site), the author has a bit of a libertarian bias in his writing style. Fortunately Mr. Taliaferro does a good job at keeping of keeping his posts relatively balanced, and the political flavor of his them often gives the blog a much more personal flavor. Regardless of your political beliefs the articles Mr. Taliaferro reviews are great resources on Panama investment news, and his site is one of the best out there for Panama real estate investors.

While meeting with Panama President Martin Torrijos on Tuesday, President Bush promised that his administration would “do everything in our capacity” to move the trade bill with Panama forward.  Bush also commended Torrijos on continuing work on the Panama Canal expansion, which he said would be mutually beneficial for both nations.  In addition to this he urged Congress to include an aid package to Central American countries such as Panama to help fight drug trafficking in the region.  President Bush has been voicing his support of several free trade agreements, the most notable being with Colombia, as well as an agreement in the works with South Korea.

The free trade agreement between Panama and the United States was drafted in 2007, and initially had more bipartisan support than the controversial trade agreement between the US and Colombia.  The bill stalled in Congress when Pedro Miguel Gonzalez, a man wanted in the US for killing an American soldier, was elected head of Panama’s National Assembly.  Fortunately for parties interested in moving the trade agreement forward, Mr. Gonzalez recently stated that he would not be seeking reelection later this year.

Despite President Bush’s comments, it is unlikely that a free trade agreement will be passed in Congress before the end of his term.  To start, the bill wouldn’t be considered until after Mr. Gonzalez has stepped down as the head of the National Assembly.  Once this happens it is unlikely that Congress would act immediately, especially as the United States presidential election nears.  Many prominent Democrats are likely to be hesitant to support free trade agreements at this time, as the weakened dollar has many Americans concerned about job security.  While President Bush may say that his administration will do everything possible to move forward on the free trade agreement with Panama, it remains doubtful that the lame duck president will have any success.

Sources:

Bush Vows To Help Panama Clinch US Free Trade Agreement (Nasdaq.com)

A Man, A Plan, A Free Trade Agreement (Politico.com)

A report yesterday showed that Panama City has the second highest hotel occupancy rate of any city outside of the United States. Panama, which had a hotel occupancy rate of 84.7 percent, was topped only by Perth, Australia. The report states that global tourism grew at a pace of 6 percent in 2007, partly due to the increase of discount and low budget airlines.

The hotel occupancy index, which is published by Deloitte, commends Panama City as being the first Latin American city to be featured on the list. The report states that tourism in Panama increased 27 percent in 2007, much higher than the expected 15 percent increase. In addition to this, Panama City showed an impressive 37.9 percent increase in revenue per available hotel room.

Even with the global economy on the rocks, it appears as though Panama is one of the strongest locations for tourism in the Americas. Tourists from Europe and Asia are likely to take advantage of the weakened dollar and visit Panama, which has been building its reputation as a safe and easily accessible destination. It is for these reasons that Panama City is likely to retain one of the highest hotel occupancy rates outside of the United States.

Read the report from Deloitte (.pdf)

Source:

Australia’s Perth Has The Highest Hotel Occupancy Outside US (Bloomberg.com)

According to a White House press release, Torrijos will be meeting with United States President George W. Bush on Tuesday, May 6th.  The two are likely to discuss free trade agreements, globalization, strengthening democracy throughout the region, and increasing security cooperation between the two nations.  Torrijos’ visit to the White House comes shortly after visiting with the President of Cuba, Raul Castro.

Read the statement from the White House here.