Panama Investor Blog

The Tower of Discord

The controversy surrounding the government plans to build a $200 million dollar tower on the site of the old U.S. embassy seems to draw criticism from a number of sectors. To begin with there are those who believe the government should not be in the business of building financial towers of which a good portion must be  leased out in order to justify it. This will compete with private interest just at a time when an over abundance of commercial space will be coming available. And with that kind of a situation wouldn't it be more prudent to wait for the prices to come down on office space and make a deal with a private company? Some believe the US embassy represents an important part of Panama History and heritage and should be converted to a museum. Others just opposed the the design which appears to be in shape of a phallic symbol. I would rather the government use the $200 million in education where long term tangible results will benefit the country.

In any case, the government is set on doing this project and I am sure there will be many controversial moments between now and 2013 when they expect to move in.

La Prensa

Roberto Gonzalez Jimenez
[email protected]

It is a project that leaves no one indifferent. The Government intends to build a skyscraper over 300 feet in the land on which sits the old U.S. Embassy on Avenida Balboa.

The Financial Tower, as it was called, would house the offices of the Banco Nacional de Panama, the Superintendency of Banks, the Superintendency of Insurance, Securities and Exchange Commission, the Tourism Authority of Panama, the Ministry of Energy and the Authority Utilities.

The Ministry of Economy and Finance (MEF) issued its Statement of Objections to hire the conceptual design and plans, in a tender that has a reference price of $ 8 billion. The construction is estimated at $ 200 million.

In the statement of objections has been included preliminary design. For this work, the MEF hired directly by $ 300 thousand at Skidmore, Owings & Merrill (SOM), a firm that participated in the design of Burj Dubai's Khalifa, the tallest building in the world.

According to official documentation, "the proponents can improve this information." The U.S. firm proposes a building height of 333 meters and 69 floors in a cylindrical shape, similar to the Torre Agbar in Barcelona or the Gherkin (cucumber) in London.

The offices occupy 55 floors. For state entities would be 30 thousand square meters and private offices, whose sale is to finance part of the building, would cover 40 thousand square meters.

In the last three plants would have a restaurant, a lounge and an observatory triple height spaces that would have independent access to public office.

In an adjacent lot would be built after a 12-storey building with a capacity of 200 thousand parking spaces. In the last two projects a government conference center, connected to the office tower by a bridge.

Another thousand parking spaces, are authorized in two underground levels located under the main tower, the building of underground parking and the park area of Santo Tomas Hospital. In the basement level under the main tower would also be a food court.

The tenderers must include in their design a proposal for connectivity to the coastal strip and the stations of Metro Line 1 which will be on Avenida Justo Arosemena.

The government's goal is to start work in 2011 and end in 2013 to match the opening of the building with the celebration of the fifth anniversary of the discovery of the South Sea.

CRITICAL

The government's proposal has been rejected from various sectors. The disappearance of the building that housed the U.S. embassy means, for many, a way of not respecting the history.

"The Panamanians have to start preserving the heritage we have. Why not a museum or a cultural attraction? "Asked Ivan Carlucci, former president of the Panamanian Association of Brokers and Real Estate Developers (Acobir).

As in other projects, the State shall assume the duties private sector activities, such as the sale of offices, but industry members said one tower will not affect the market.

The president of the Panamanian Chamber of Construction said that "at the beginning is a high investment, but will serve to reduce public spending on rent, we support it." Carlucci, however, think that in a tower more than 35 plants, the costs grow exponentially and that there were other cheaper solutions.

Also interpreted the project as a way to satisfy the megalomaniac ambitions of the Government, when in the same town there without addressing basic needs, for example, refuse collection, water or the creation of sidewalks and public spaces.

COASTAL BELT

SOM's proposal also includes a recreation of how the future would be in Panama City with the new tower and the extension of the coastal strip to the Amador Causeway.

You can see the location and concept of the convention center that the Government plans to build in Chorrillo and the completion of the promenade on a breakwater, creating more space in front of the Museum of Biodiversity.

It is not said, however, if the coastal strip would cross the Old Town with a skirt tunnel or if, as some time has considered the Government, a project that has raised the alert about the risk it would have on the historic, declared World Heritage Site.

Santa Maria mega project still a go

When I first heard that the Santa Maria project was to be built between Costa del Este and the Tocumen airport I was skeptical. Panama was in the height of the building boom and as my readers know I was predicting a bust since early 2007 which came in late 2008. This was/is a very ambitious project of million dollar  homes, golf courses shopping centers and more and what made it seem possible at the time were the players involved. The biggest names in Panama were involved who have both the reputation and resources to make it happen. But as it looked into my crystal ball it just seemed to me their timing was wrong. I had not heard much about the project of late, but in this weeks La Prensa they report it may soon begin to take shape. I certainly wish them a lot of good fortune in this endeavor.

Excerpts: 30 years ago few would have imagined that in the land where the landfill of the city and in the mangrove area of Juan Diaz build homes which would be reflected more than a million dollars and apparently many are willing to buy to be near the city.

Eduardo Ameglio, current president of the National Council of Real Housing and one of the first to purchase a property in Costa del Este, recalls that 12 years ago square meter of land ranged between $ 90 and $ 130, a high cost for the time, but laughable when compared with current prices over $ 2000 and $ 3000 per square meter.

The construction of the two corridors, plus the South that the North, said Ameglio, was pivotal to the construction of high value projects.

Martin Sosa, director of the project, said the complex will be developed on 285 hectares and currently work in the first phase of the residential area comprising 115 hectares.

Sosa explained that last year there was a perception that the project had succumbed to the international financial crisis, because there was no movement of machinery, but explained that it was all part of filling jobs that were made in this area for its proximity to mangroves.

The first phase of the project which includes housing whose base price starts at $ 500 000 and the first nine holes of golf designed by Nicklaus Design, is scheduled to be delivered in November 2011.

Although not specify the total amount of investment, Sosa acknowledged that more than $ 100 million, funds provided in part by investors and by means of a loan involving five banks, led by Banco General.

But this is not the only project that is running this group of entrepreneurs across the South Corridor, on the road to Llano Bonito, stands the Santa Maria Business Center, where 85 lots will be paved in 33 hectares for buyers to build their facilities.

Panama: Hilton Hotel to Open Before 2011

With all the new hotels opening in Panama I wonder when the rates will drop. It is so amazing how the rates have mostly doubled in the last three years to where a decent hotel is $200 and up for a nights stay. Of course it is those high rates and high occupancies that have drawn all these hotel flags to Panama. But the fact is the property is owned by investors who acquire the flag name and management for a significant fee. I expect occupancies will drop as more competition comes online and then a rate battle must ensue. The lower rates will make it more attractive for tourism and hopefully things will balance out.

Source: pa-digital.com.pa
Tuesday, June 29, 2010

The $25 million, 213-room Doubletreee Hotel by Hilton will open by the end of 2010.

Satis Patel, president of Blue Star Hospitality, the administrator of the franchise, remarked that the hotel will employ 200 people when it opens.

“Patel commented that hotel occupancy has been low in the past two years, as a result of the global crisis, but the situation has not been as bad as in other countries where they operate”, reported pa-digital.com.pa.

Read more at the source article by Michelle Domínguez (only in spanish)

The lights flicker again for Los Faros

I know a number of my readers have put down payments on this project. It was not long ago that it was announced that the project was again underway after being stalled for several years. The photo below is accurate to where it currently stands, a hole in the ground in a prime location in Punta Pacifica next to the mall. Now the courts in Spain look like they may force bankruptcy.

La Prensa

Problems Mall Group

The Barceló tourism firm marketer claims to the Spanish promoter a debt of more than $ 3 million.

Roberto Gonzalez Jimenez
[email protected]

A court in Madrid, Spain, declared that the company Inmoptions, the trading of Grupo Mall in need of creditors contest, which was previously known in Spain as default.

According to business daily takes five days, the contest was requested by Barcelo, a tour group Inmoptions claiming more than $ 3 million.

The company that developed The Lighthouses of Panama announced in a statement it had lodged an appeal against the declaration of bankruptcy, adding that "Inmoptions SA will offer security for the payment to creditors, including Barceló Business SA, with there is disagreement in the figure, which has motivated its application for bankruptcy, as recorded by the newspaper.

Representatives of the company in Panama refused to comment on the reports.

According to its website, Inmoptions has offices in Spain with offices in Great Britain, Ireland, Denmark, Germany, Italy, Mexico, Panama, Argentina, United States, Canada and Russia.

In those markets where it sells its projects is mainly found among Los Faros de Panama.

According to press clippings can still be found on its website, the developer sought to complete the project in late 2009.

Now we are past the first half of 2010, the project has just completed the foundation and the work has not been any progress for over a year. Mall Group announced in February that it was bidding for the construction of the central tower, where in addition to the residential part would develop a chain hotel run by the Dubai-Jumeirah.

Panama Pacifico mega-project accelerates the pace

About two years ago London & Regional's mega project Panama Pacifico began to sponsor my blog as a way to reach potential investors for their project. From what they have shared with me this has been a very successful relationship and am proud that I have been involved to some degree with the success of this incredible project. Panama Pacifico represents  one of the largest revitalization projects worldwide for last 50 years and will play a very important part in Panama's future. This article from La Prensa provides us with additional information on the status of the project.

Thus far 58 companies have signed contracts to to set up headquarters, including multinationals include Dell, Caterpillar and 3M.

 Roberto Gonzalez Jimenez
 [email protected]

  Given the magnitude of the project, we can say that is still in a nascent stage of implementation.  But Panama Pacific, project logistics, commercial and real estate that is developed in the former Howard military base is reaching a level of progress that has exceeded the expectations of its promoters, the British company London & Regional (L & R).

 There are already 58 companies have pledged to settle in Panama Pacific. One of the latest is VF Corporation, American multinational which sells clothing brands like Lee, Wrangler and Nautica.

  The firm joins Dell, 3M and Caterpillar, three large multinationals that have shaped in a way the letter of overseas development.

The number of companies with contracts to settle in the area could increase soon, as there are several ongoing negotiations.

 History

  In 2000 acres, Panama Pacific converges the past, present and future of Panama.

The construction of the Canal area and the two bunkers that are still preserved remember the military origins of the area and the U.S. presence.

  With the ground already in Panamanian hands, a World Bank study found that the area was ideal for logistics and commercial development.

  In 2007, L & R won the tender to develop 400  hectares over the next 40 years.

The company is committed to invest $ 705 million for the duration of the contract, of which $ 405 million must be invested before 2015.  At the end of this year, L & R estimated to be allocated $ 154 million, mainly in infrastructure development.

 This is exemplified by the 2271 people, according to data recorded in January, working in companies located in Panama Pacific.

John McKay, a representative of L & R, said that in the first five years of grant they expect 4000 jobs, exceeding initial estimates.

In ten years, there will be about 11000 by the 40 year concession, 40000.

  For the jobs generated by companies located there will have to add the necessary manpower for the construction itself of the area and internal and external connections.  The Government has announced it will construct a highway linking Panama Pacific with the Centennial Bridge, which will improve connectivity with Colon and Howard.

  President Ricardo Martinelli said the government plans to build a new bridge or tunnel to cross the Panama Canal and Pacific unite with the extension of the coastal strip, which in principle come to the Causeway.

Residential

They have already begun earthwork for first phase including the construction of 126 town houses, 78 apartments and commercial premises. These residences will be the first of what will be the center of Panama Pacific. In the next few years they will start developing a golf course community, luxury hotels and resorts.

In total, when completing the project, there will be 20 thousand houses and apartments, a real city across the Canal.

New hotel announced for Pacific coast

I continue to be surprised at the continued investment into hotels in Panama. Now another large all inclusive one has been announced near the Nikki Beach and Decameron operations by the RUI company out of Spain. Only $100 million going into this one. They have over 100 hotels already so what is a few more. I guess with Spain going down the financial tubes it is time to get money out into something tangible. The benefit to all of us in Panama is they have to compete for business with the locals in the off season so you will see $49 a night for great fun.

Come on down! More brings more.

From La Prensa

MINERVA BETHANCOURTH
[email protected] 

  Competition intensifies beach hotels in the province of Cocle. Nikki Beach, Decameron and Bristol Buenaventura may have in the medium term an additional competitor, a Riu.

 This is the second bid in Panama Spanish chain, which building a hotel in Havana's Calle 50, which is expected to open in September.

  Continuing the holiday court that has developed at the global level, it was learned that Riu identified and purchased land in the area declared as a tourist site in the district of Antón, Cocle Province, to carry out the construction.

To date holds a permit for the movement of earth, but hotel managers chose not to delve into details about the new center, saying they are focused on the construction will require an investment of 100 million dollars.

  Carlos Cordova, director of Riu chain's sales in Panama, said at the conclusion of this work may discuss and define the characteristics of the new hotel in the district of Antón.

  The cost of the hotels that have been developed in the district of Antón has ranged between 8 million and $ 200 million, being the pioneer Decameron in the region and also the "opening act" of all-inclusive.

  International competition

  Riu, a native of Mallorca, has over 104 hotels spread over 21 countries and in terms of income in accordance with cincodias.com portal, managed a thousand 265 million dollars.

  The chain for this year includes an investment of $ 250 million to strengthen its portfolio through a series of adjustments and construction of new hotels, the site reported.

 Besides the hotel being built in Panama City, the company hopes to make the cut opening in countries such as Brazil, Turkey and in the area of Varadero, Cuba.

  The process is part of a strategy of expanding to countries where they operate the hotels, considered as four and five stars.

New phallic shaped financial tower has Panamanians feeling screwed

One has to wonder where the politicians think money comes from. After all, they produce nothing but expenses and bureaucracy. So in today's Panama America the Minister of Finance tells us that the respected architectural firm Skidmore Owings & Merril was paid $300,000 to design this new skyscraper to house government offices. The government does not seem to be concerned about the cost of building this structure as much as arguing that there is little  similarity in design of a building in Spain. 

It is planned to sit on the land where the old  American Embassy used to be. The location was leased by the U.S. government for 99 years and has a lot of time left on that lease, but have apparently has been given it back to the Panamanian government so they can get further into debt.

A shiny new building will not improve government services and is just putting perfume on a pig. They would be better off spending these $200 plus millions on education or waiting another year and buying up some high rise apartment towers cheap and converting them to offices IMO.

Reading comment on the Panama America website gives us some idea of what Panamanians feel about this latest plan for their money. There are over 80 and few are happy about it.  I have translated some of them below.

"We can not have this kind of work clearly fascist, or built by a government while other similar towers like Barcelona is the product of private initiative, is intended to make "a finger" by a minister that Vallarino or know anything about these matters, nor within its competence.

andy  18-05-10  [22:20] 05/10/1918  andy [22:20]

"200 million dollars to a few games, this government is going to go into debt to go with their madness and the party goes, the people pay and cries"

"It is infuriating to listen to politicians that this is a project of the first world, when in this country there are a number of problems of a Third World country or worse, spend that money on health, education, security and roads, then think of a better proposal, as the city government but with all comforts."

"It is obvious that this horrendous project is not financially or economically viable. It is thought that Alberto Vallarino, who still does not realize that people do not want a candidate for nothing, seeks to make a public work, with our taxes, of course, as if he were a government alone. Alberto also do not want to mix with the rabble of officials and institutions that would move to the city government in Curundu, a very chusmero for him, so he would stay away from the mob with their exclusive offices on Avenida Balboa, up high, away from the populace.
Rabble, rabble, poof courier 10.05.1918 [16:14] "

"This design won a vulgar solamentre not copy, it's a mess from every point of view. And it looks like a dildo, like those used in the mef when taxes increase.
Courier Kenya 05/18/1910 [15:49] "

Comforter, preservation or positorio Condom use, whatever. In the end it always be something that is entered from behind. So we're going to do with this mam otreto. 250 million for this and tumbling schools, there to pay teachers and health sisemta better not talk. We like the Americans who make cuts to health and education, but give 20 million to NASA to send a rocket to see if there was ever dilute the planet Mars. Learn to prioritize. Invest in education first, then all these vanalidades will come along.
The courier sensible 10.05.1918 [12:28]

Decameron to expand

My wife and our children love to go to the Decameron for holiday. They have been there three times in the last year. I usually take a pass as the heat and I just don't get along lately. They were there last week and the reports I got of how much fun they experienced explains the tremendous success this group has had for many years. They are always busy and the quality of what they supply is a great value. It is not just sun, food and drink. The activities and entertainment is what my family rave most about.  But the Decameron's real success comes from their marketing engine that fills planes from all over the world with sun worshipers who want an all inclusive package. Although I am skeptical when  new projects are announced these days, when it comes to the Decameron, it is a very safe bet IMO.

Machine translated from La Prensa

Raul A. Bernal Bernal
[email protected] [email protected]

The addition of 32 rooms, construction of 350 houses, the development of clubs and entertainment mall that connects to the Pan American Highway are some of the projects that are seeking to enforce in the resort and urban Golf Royal Decameron Beach Resort & Villas, located in the area of Farallon, Cocle province.

  So advanced it Marta Molina, vice president of hotel investments Tourist Caribbean Property Group (CPG), a company that owns 85% of the resort.

Molina said the residential units only invest an amount exceeding $ 20 million.

  The CPG company is also doing the necessary analysis for the construction of a shopping center and it will include some 30 thousand square meters of land area that will offer various commercial and service establishments that want to establish themselves there.

13 new La Quinta Inn's to open in Panama

Just when you thought Panama could not take another hotel, along comes a fellow with a plan for 13 more. Of course brand recognition will be a plus, but with occupancy levels on the decline, you would think investing in hotels might be risky. After all, many of the announced hotel projects have yet to finish construction and they were set to nearly double Panama's room capacity if I recall correctly. But I guess when you are the center of the universe, there will always be a demand that will outstrip supply.

More brings more, I always say.

Excerpts from La Prensa;

The map shows where they have planned there projects.

Roberto Gonzalez Jimenez
  [email protected]

The La Quinta hotel franchise landed in Panama with an ambitious project which includes construction of 13 hotels throughout the Republic in the next seven years.

The local investor Lincoln Garcia, president of Interoceanic Hotels, and Rajiv Trivedi, head of Development and Franchising for La Quinta, signed yesterday the contract for the development of the franchise in Panama.

  In total, plans to invest about $ 30 million and the addition of more than 500 rooms at the hotel offer nationally.

  The first hotel will be in the capital, in the Albrook mall PanCanal owned by the same employer, and will have 140 rooms.  This complex could begin construction later this year and open to the public in mid 2012.

  The company also acquired land for their developments in Ilha Grande, Coronado and El Valle, which projects smaller hotels, about 30 rooms.

  The other nine locations are: David, Aguadulce, Colon, Bocas del Toro, Pedasi, Santiago, Las Tablas and Chitre Penonomé.

  The contract was executed in three phases, each of which provides for the construction of 170 rooms.

Although Garcia is currently the sole investor, says he is open to partnering with local entrepreneurs, "preferably in the areas where hotels are developed.

Trivedi said Panama's economic growth, political stability and the projection of multiplying foreign investment over the next 10 years as some of the attractions to start its journey in the country.

  It aims to fill a gap "between luxury hotels and those cheaper", taking into account the existence of a growing middle class that travels.

  Panama will be the first country in Central America and the second in Latin America in having the offer of La Quinta, a mark established in North America.

  Based in Dallas, Texas, the franchise has more than 750 hotels in USA, Canada and Mexico under the brands La Quinta Inn and La Quinta Inn & Suites.

Los Faros mega project to rise from the grave

This news certainly comes as a complete surprise. The project was supposed to be ready for occupancy this year, but it has yet to come out of the ground. Everyone has pretty much given it up for dead. Now, low and behold the local papers say it will rise up from the ashes and be even taller, 361 meters and 83 floors.

Panama never fails to surprise. When you think that it can't build another high rise in these tough economic times, someone comes up with the money and makes it happen. Apparently they will convert more of the residential to commercial and the project will include a 400 room hotel operated by Jumeirah Dubaití chain. So there apparently is still a great deal of money out there looking for a home and this mega project by Grupo Mall is the happy recipient. We wish them good fortune.

To give some scale the building to the bottom left is Multi Plaza mega mall and the buildings at lower right are the Punta Pacifica, Johns Hopkins affiliated hospital.