The Costa Rican Social Security Department is looking for buildings to house one thousand employees over three years while its central building is repaired.
The Social Security Department (CCSS) plans to spend almost $13 million on renting buildings, of which nearly $2 million has been earmarked for document storage and about $200,000 to move the furniture.
It has been reported that the vacancy rate in the office segment in the real estate market now exceeds 10%.
Nacion.com reports that "... an analysis by Colliers International shows that the office market is undergoing a period of greater caution, since the vacancy rate is above the 10% threshold for defining market saturation."
Increases in the average price of office space have been recorded due to less construction of these types of buildings in the first half of the year.
Figures from a report by CBRE Panama cited by Capital.com.pa indicate that construction has declined in this segment due to increases in the price of materials and high utility rates, leading to the average price of "... class B buildings rising from $2,300 to $2600 per square meter."
Although construction of office space keeps rising, the real estate union has projected that rental prices will remain steady this year without any significant changes.
The union of real estate in Panama City believes it is not yet time to speak of a "glut" in the office market, although the inventory continues to grow, without having a direct impact on rental prices. Figures released by Capital.com.pa show the office market "... at the end of 2015, has 236,192 m2 available and approximately 433,496 m2 under construction. "
Construction has been announced of Plaza Centroamérica, a 14 thousand square meters building on eight floors which will house shops, restaurants and offices.
The Nicaraguan company Edificios Comerciales S.A. (Edicosa) announced that Plaza Centroamérica will have an area of 14 thousand square meters and required an investment of $10.5 million. The building should be completed by the end of 2016 and will be located on the northwest side of the Centroamérica roundabout.
In order to shorten timeframes the Ministry of Transport and Public Works of Costa Rica intends to award the work not by tender but by private contest.
The difficulty in implementing public works Costa Rica is notorious, due to a heavy system of checks and guarantees which causes sometimes indefinite extensions of state infrastructure projects. Now the Ministry of Public Works itself is seeking to circumvent this legal tangle by awarding a work $40 million through an emergency system of a direct contract contest.
Increases have been reported of up to 20% in the demand for office space in excess of 50 square meters, with prices ranging from between $8 and $12 per square meter.
Currently the monthly rental price for corporate buildings around $19 per square meter, one of the types of offices with the highest demand in southern sector of the capital, the Dupla Norte, and the road to Masaya. Overall, location, parking availability and price are the main factors that companies consider when leasing office space.
The Ministry of Finance has justified the purchase pointing to savings of several million dollars every year by concentrating all activities in one building and not having to pay rent.
From a statement issued by the Ministry of Finance of Costa Rica:
Closing the cycle of paying rent in the Ministry of Finance is the purpose of the initiative presented by the chief of this institution and First Vice President, Fallas Helio, for the purchase of a building which would house more than 2,000 of the institution's staff members, from the second quarter of this year.
Predictions are that the office vacancy rate in Panama City, currently 33%, could reach 45% in 2016.
Following that under usage prevailing in the office market rental rates have dropped by up to 30%. In the case of hotels, they are also experiencing this phenomenon, the vacancy rate has fallen by 50% and in turn nightly rates have decreased by 28%.
Specialty and department stores are the entities demanding the most space in commercial centers and malls in the capital.
The vacancy rate for Class A commercial property fell by 7.4% in the first half of 2013 to 4.8% in the second half of 2013, due to the fact that the rise in meters available in major shopping centers has been absorbed at a good pace, with many of those spaces being leased before the works are finished, reported a study by the real estate firm CBRE Panama.
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