: Towers and prices on the rise in Costa Del Este

By Kent Davis

ON THE HEELS of the announcement that a second major shopping center will be going in Panama’s suburban Costa del Este, absorption is strong for both residential and commercial development in Panama’s first master planned community.

Residential prices in particular in the Costa del Este neighborhood have seen marked appreciation over the last two years compared to similar high-end areas of Panama such as Balboa Avenue and Punta Pacifica, where prices have been relatively flat.

According to commercial real estate agent Jorge Gardellini with Arosemena Real Estate, retail space is in short supply and pricing has been driven up to as high as $35.00/meter for prime street level options. An entire floor in PH GMT, where insurance giant MAPRFE is located, recently rented out for $25.00/meter and the price per square meter on the sales side is averaging over $2,400 to 2,600/meter for unfinished office space in this office tower in particular.

Atrio Mall, the second of two major shopping centers in construction in Costa del Este,http://www.atriomall.com/index.php/inicio/perfil has seemed to increase the draw for living in  Costa del Este because it means that residents of this suburban district less than 10KM from downtown Panama may one day be able to take care of all of their shopping, dining, school, and business without venturing into the city.

High-end residential towers such as Ocean One, Aqua Two, and Murano, all located along the oceanfront boulevard in Costa del Este have an average selling price of between $2,400 – $2,800 per squaremeter. While this is not considered the “top” pricing (the current leader is Corccione’s Vallery Point in the Santa Maria Development with a high floor unit offered at over $3,500/meter), it is still much higher than what similar Panama real estate offerings are selling for in other high end districts like Punta Pacifica and Balboa Avenue.

Pearl at the Sea (a project currently finishing delivery) is a two-per-floor luxury high-rise originally sold for $800/meter back in 2005, is now fetching roughly $1,800-$2,000/meter, depending on the floor height within the building. Pearl is experiencing a phenomenon that is quite common in Panama: just as the project is getting delivered and the developers are calling in the balance due on pre-construction sales, a few owners who cannot close are selling off their units at below market pricing. This is a short term and very building specific correction that usually re-adjusts within 12-16 months after the first apartment is delivered ( delivering an entire building can take as long as 12 months). Currently, approximately 20% of Pearl units are either for sale by owner or by the developer, providing great opportunities for investors who can identify or negotiate below market opportunities from sellers.

The majority of the buyers in Costa del Este are either Venezuelan families or executives who prefer to live in the same neighborhood in which they work. Companies like Proctor and Gamble, Copa, Addidas and new arrivals such as Phillip Morris are all driving demand for well built properties which are in short supply.

The pipeline for new residential condo deliveries will be slow over the next two years in Costa del Este, as most of the development sector is focused on commercial projects, meaning prices should continue to see modest appreciation.

This is one of a series of articles written for Newsroom by Kent Davis a Panama based realtor. The views expressed are his own and are not necessarily endorsed. Kent may be reached at kent@panamaequity.com