Industry has not traditionally been among the largest sectors of Panama’s economy, which is based largely on services – especially transport and logistics, which make up more than one-fifth of GDP – but recently the sector has begun to benefit from the development of value-added services. A sizeable number of companies have in recent years begun trying to leverage Panama’s connectivity to develop industry-related activities like storage and value-added services, including labelling, repackaging and cargo consolidation (see Transport and Logistics chapter).
Buoyed by the value-added services market, Panama’s industrial real estate segment is showing new promise. CBRE Panama, a real estate services firm, reports that in 2014 this segment added more than 180,000 sq metres of space, reaching a total of 800,000 leasable sq metres. Growth is set to continue in the near term: more than 375,000 sq metres are to become available in the 2015-16 period, with lots ranging from 1000-12,000 sq metres for both industrial parks and basic infrastructure plots. “This is one sector clearly in an expansion phase, boasting a healthy 8% vacancy rate and reaching the 800,000 sq meters mark,” Danny Quirós, director of valuation and consulting at Colliers International Panama, told OBG. “The sector showed year-on-year growth of 26% between December 2013 and December 2014.”
Space has filled even as stock has grown. At the end of 2014 the vacancy rate ranged from 9% according to Colliers to 15% according to CBRE – representing reductions of 20% and 1%, respectively, from 2013. The fall in vacancy was due mainly to a clutch of projects opening as pre-sold developments.
The land offering stayed constant during 2014 and should remain so in 2015, according to Colliers, since more than 700,000 sq metres are available in lots of various sizes. Average monthly rental prices in the industrial segment for 2014 were just under $9 per sq metre per month, with closing prices discounted from list prices by an average of 10%. Industrial land was valued at an average of $315 per sq metre as of end-2014, having grown more than 10% during the year, while the equivalent figure for industrial buildings was $1200.
Parks & Projects
The Panama East (Tocumen) area is one of the main runner-ups with industrial and logistics parks. Tocumen has over 370,000 sq metres of space and is growing fast with 140,000 more under construction. The Tocumen airport has also seen an important increase in cargo operations, with growth surpassing 10% in 2014. This, plus the area’s connectivity, has helped create a logistics centre around Tocumen, with areas like Parque Industrial de las Americas, developed by Grupo Shahani and covering more than 200 ha, or Parque Sur with 25 ha.
Panama Pacífico is another good example of the country’s success in industrial real estate. Started in 2007 under the London and Regional Panama consortium, this project is a flexible space development for housing, commercial and industrial space covering more than 1400 ha next to the canal. The PanAmerica Corporate Centre accounts for most of its warehouse space, with 140,000 sq meters developed and almost 880,000 sq metres in total, and the centre is already home to companies like BASF, Covidien, SamTec and 3PL Panamericana. It also has its own special economic area with tax, labour, visa and Customs benefits as well as its own airport. Panama Pacífico has so far been successful at selling both industrial and commercial space, and is currently offering a second residential phase. Reported figures by Panama Pacífico state that more than 11,000 people are projected to work in the area by mid-2015.
Current conditions suggest that the industrial real estate segment may be lining up for sustained growth in the coming years. Aside from strong sector figures, the opening of the canal expansion will likely have a positive effect on the sector’s development, creating a need for more advanced processes and offering further possibilities for growth.
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