"Los Faros de Panama" began in 2006 with three towers of up to 361 meters high, valued at $ 600 million.
Four years later, developer Mall Group owes $ 100 million, of which $ 31 million are to clients whom purchased apartments. After several complaints, a judicial administrator was appointed and he filed for bankruptcy, stating that the company has "no free assets and the inability to cope with the most basic financial obligations," reported Prensa.com.
Industry experts suggest that in this type of purchase in which early payments are made to developers of the project, the model worked while the sector was operated by Panamanians, but began failing with the arrival of foreign developers and "pirate" real estate brokers.
Some brokers and developers propose the creation of a trust fund where initial payments are deposited, "thus ensuring the investment." Others, however, note that new regulations could end up making the developments "too expensive".
The high prices of properties being recorded in parts of the country are scaring away foreign investment and limiting the recovery of those most affected by the 2008 crisis.
The question posed by foreign investors to Realtors: "'Why invest in Costa Rica when the price of the property is the same or higher as in New York but with less quality services?", is proof that the real estate bubble remains as active as before the crisis of 2008.
Project developer Grupo Mall will invite bids for building the central structure of the project.
In a press release, they also announced that construction works would resume on April.
“15 meters have been added to the structure, it will now measure 361 meters tall (83 stories). There will be 20 floors for office and parking space, plus a 400-room hotel managed by Dubai corporation Jumeirah”, reported Prensa.com.
The real estate project 'Los Faros' in Punta Pacifica is stalled because bank financing has fallen through, so negotiations are now taking place with investment funders.
An article in Lne.es quotes Grupo Mall President Julio Noval, who says the company will cease operations in Spain in order to pursue it’s projects in Latin America, a luxury development in Campeche, Mexico, and "Los Faros de Panamá", consisting of three 361 foot towers, valued at $600 million.
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