CBRE Panama Office4Q2010

7/29/2019 CBRE Panama Office4Q2010

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Office Market Panama City2nd Half 2010www.cbre.com/research

CB RICHARD ELLIS

Quick Stats (Class A)

Change from last

Current 2S 2009 1S 2010

acancy 4.7%

ease Rate $21.51

ale Price $2,195

onstruction 369, 6 61m

Note: The arrows are trend indicators overhe specified time period and do notepresent a positive or negative value.

The office market in Panama Cit

performed well during the second half o

2010. Vacancy rate for Class A officbuildings improved to 4.7%, compared t

previous period (5.5%).

The submarket with the highest vacanc

rate along the first half 2010 was th

Reverted Areas, which now is fully occupie

and at present has 11,124 sqm unde

construction to satisfy the demand for offic

spaces in this area.

Average lease rate slightly decrease

around 2.2% from the beginning of th

year until this last period. Likewise, thaverage sales price showed a reductio

(less than 1%). The most expensiv

submarket in the city is the Banking Are

due to the accessibility and infrastructure

offers.

During 2010 Panama's economy continued

its strong growth despite the weak

performance of other regions of the world.Fully year GDP growth estimates are at

6.2%, as the economy grew 8.4% in the

third half of this year.

The Panamanian government continues to

invest in several major infrastructure

projects, including the improvement of

different road routes ($2.5 billion), a new

urban rail transportation system to be

completed in 2014 ($1 billion), the creation

of the new Pacific Economic Zone, and the

new bus system which started in December.

There are plans to bridge the two main

routes (the North and South Corridors) in

several locations - creating a highway

system which will facilitate tourism,

industrial development and logistics alike.

The cleaning of Panama Bay is still

2010, CB Richard Ellis, I

Vacancy vs. Lease Rate (Class A)Lease Rate

Vacancy$21.51 /m/month

4.7 %

Vacancy decreased from 5.5% duringthe first half of the year, to 4.7% inthe period between July to December.

Average lease rate started at$22.00/sqm at the beginning of2010 and ended the year at$21.51/sqm.

Sales prices also declined slightly,from $2,210/sqm to $2,195/sqm.

No new construction started duringthis period, but construction activitywas reviewed and revised upwards.

News

,

to remain stable or slightly decrease

considering the amount of square meter

under construction in the cit

(369,661sqm). Those will double th

present offer of the Class A office markesize. To achieve the demand, prices need t

stay competitive and attractive for local an

foreign companies and investors that ar

looking forward to bring their business t

Panama.

$

$

$

$

$

$

$

0%

2%

4%

6%

8%

10%

2008 1h 2008 2h 2009 1h 2009 2h 2010 1h 2010 2h (P)

underway, along with the expansion of the

international airports and the construction

of several hospitals. The largest investment

by far is the expansion of the Panama

Canal, now estimated to cost $5.25 billion.These developments, coupled with the

investment grade status received at the

beginning of 2010, made Panama a

popular destination for regional

headquarters operations.


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SubmarketLeasable Area

(m)Available Area

(m)Vacancy

RateUnder Construction

(m)Avg. Asking Lease Rate

(USD/m/month)

Banking Area 108,860 4,947 4.5% 72,248 $20.00 $25.00

South 46,500 3,703 8.0% 49,553 $18.00 $22.00

San Francisco 67,630 2,938 4.3% 93,467 $23.00 $28.00

Bethania**

Costa del Este 45,660 1,524 3.3% 143,269 $19.00 $23.00

Reverted Area/Others** 10,200 0.0% 11,124 $16.00 $20.00

Class A Total 278,850278,850278,850278,850 13,112 13,11213,11213,112 4.7% 4.7%4.7%4.7% 369,661369,661369,661369,661 21.5121.5121.5121.51

Class B + C Total 466,699466,699466,699466,699 20,409 20,40920,40920,409 4.4%4.4%4.4%4.4% 57,174 57,17457,17457,174 17.4817.4817.4817.48

Total 745,549745,549745,549745,549 33,52133,52133,52133,521 4.50% 4.50%4.50%4.50% 426,835 426,835426,835426,835

Panama City Class A Office Market

Economic ConditionsGDP

Inflation

6.2 %

4.9 %

** This area does not have Class A buildings.

6%

8%

10%During the second half of the year, Panama's economy continued itsstrong growth, closing at 6.2%. Several projects are underdevelopment to improve the productive sector, infrastructure (metrosystem, roads, irrigation systems, potable water), various social areas,environment, tourism, administration and justice, among others. Worksare planned to be completed by 2014 with a total investment of $13.6

2010, CB Richard Ellis, Inc.

During the second half of 2010 new constructions for Class A office

buildings started. Variation from the 1st half to the 2nd half is around

11,000 sqm of new space.

The submarket with the most construction is Costa del Este (143,269

sqm) followed by San Francisco (93,467 sqm) and Banking Area

(72,848 sqm).

Construction of Class B office buildings also remained the same during

the second period of the year.

Construction Construction 369,661 m (Class A)

Source: Panama General Comptrollers Office.

0%

2%

2006 2007 2008 2009 2010

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2008 1h 2008 2h 2009 1h 2009 2h 2010 1h 2010 2h

.important cities for doing business.


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At the beginning of 2010 lease rate reached $22.00/sqm and it

decreased during the year to $21.51/sqm .

San Francisco continues being the most expensive submarket with an

average lease rate of $25.00/sqm, followed by the Banking Area at

$22.30/sqm and Costa del Este at $21.50/sqm.

During the next period, lease rate is expected to remain stable or

sli htl decrease due to the new Class A inventor that will be added to

The Class A office vacancy rate decreased from 5.5% to 4.7% during

the second half of 2010.

During the previous period, 10,200 sqm were included into the market

at the Reverted Areas submarket with approximately 30% of vacancy.

According to the obtained data, all available space in this area were

occupied.

The highest vacancy was registered in the South Submarket, with an

8%, followed by the Banking Area Submarket with 4.5%.

Vacancy Vacancy Rate 4.7 % (Class A)

Asking Lease Rate Average Asking Lease Rate $21.51 (USD/m/month) (Class A)

0%

2%4%

6%

8%

10%

2008 1h 2008 2h 2009 1h 2009 2h 2010 1h 2010 2h

$ 5

$ 10

$ 15

$ 20

$ 25

$ 30

2010, CB Richard Ellis, Inc.

During the second half of 2010, the average sale price listed for Class A

office buildings slightly declined when compared to previous rate. At

the end of the first half of 2010, the average sales price was

$2,210/sqm.

The highest priced submarket was the Banking Area at $2,248/sqm,

followed by Costa del Este at $2,199/sqm. All prices are obtained from

listed sales prices, provided by developers.

Prices are expected to remain steady or slightly decrease due to the

new Class A spaces that will be added to the market during the period

between 2011 and 2013.

the market between 2011 and 2013.

Sale Price Listing Average Sale Price Listing 2,195 ($/m - Class A)

$ 0

2008 1h 2008 2h 2009 1h 2009 2h 2010 1h 2010 2h

0

5001,000

1,500

2,000

2,500

3,000

3,500

2008 1h 2008 2h 2009 1h 2009 2h 2010 1h 2010 2h


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Documents

CBRE Panama Office4Q2010