Between the first quarter of 2020 and the same period of 2021, the total leasable area in Panama City increased by 4.79%.
Commercial real estate consulting firm Newmark Central America reported that the industrial and logistics real estate market inventory in the Panamanian capital totaled 1,420,480 square meters (m2) of total leasable area, a figure that exceeds the estimate of a year ago.
The oversupply of office space and changes in the dynamics and ways of working of companies have led the office rental market to a corrective or adjustment phase, which is mainly evidenced by the downward pressure on rental prices.
At the beginning of 2021, CentralAmericaData expected that in the coming years, 4 out of 5 companies will bet on hybrid work modalities, which include face-to-face and remote activities. This phenomenon will force office supply to adjust to the new market conditions.
Because the supply of office and commercial buildings has increased, and at the same time unemployment has also risen, in Costa Rica the directors of these properties foresee that next year the parties will have to renegotiate the contracts.
Data collected by Colliers International indicate that between June 2019 and the same month in 2020 the total inventory of commercial buildings increased by 1.5% from 1.16 million m2 to 1.18 million m2.
As a result of the crisis, in Costa Rica in June of this year the rate of availability of premises in shopping centers climbed to 11.8%, a proportion of concern because a healthy level should not exceed 10%.
Although at the beginning of the covid-19 outbreak in all the markets of the region the interest for the rent of apartments of residential use diminished, at the beginning of April the fall stopped and in some countries an incipient rise is reported.
Through a system for monitoring changes in consumer interests and preferences in Central American countries in real time, developed by CentralAmericaData, it is possible to project short and long-term demand trends for the different products, sectors and markets operating in the region.
It is predicted that in Panama due to the health and economic crisis the inventory of available properties will increase, a situation that will put downward pressure on property prices and rents, affecting mainly the office and commercial space segment.
Directors of the Panamanian Association of Real Estate Brokers and Developers (Acobir) estimate that in the context of the health crisis resulting from the covid-19 outbreak, sales or rental prices in the local market could contract between 20% and 25%.
As a result of the crisis, the unemployment rate of commercial premises in Costa Rica rose from 8.81% to 9.86%, and the average price per square meter fell by 3%.
It is estimated that 20% of the stores located in the country's malls will not be able to open after the most critical phases of the covid-19 outbreak are overcome, according to Colliers' figures.
Almost a year after starting operations in Costa Rica with its first building, the American WeWork, dedicated to the rental of shared work spaces, announced that it plans to invest in two more properties in the next two years.
Although some office buildings report acceptable levels of occupancy, since the crisis began in April last year, rental prices in Nicaragua have fallen by up to 35%, and no improvements are envisioned in the short term.
Businessmen dedicated to the rent of real estate assure that in this scenario of political and economic crisis, they have had to diminish costs to give facilities to the clients and thus to stimulate the contracts.
Although in Costa Rica the level of unemployment of buildings in industrial parks is 8%, some precincts are facing threats, since companies could leave them because of the traffic congestion in the area where they are located and the travel time of employees.
For Colliers, other threats faced by industrial parks in the country to have their facilities unoccupied are that companies have several sites for the separation of their processes and competition for human resources.
In the last year, the number of vacant commercial premises has increased in Costa Rica, behavior that is partly due to the economic situation of the country and changes in consumer preferences.
Figures from Colliers International specify that in the last two years the rate of availability of commercial premises in the country has registered an upward behavior, since in the first quarter of 2017 a rate of less than 4% was reported, and from January to March 2019 that proportion went up to 8%.
Between January and June the average rental price per square meter requested from warehouses in Panama City dropped from $8.95 to $8.40, due to a slight increase in the supply of available spaces.
According to a report prepared by the CBRE, at the end of the first six months of the year, average rents requested from Class A warehouses decreased slightly from US $8.95 per m² per month, to US $8.40 per m².
In the first half of the year, the commercial supply in Panama reached 1.8 million rentable square meters, 4% more than was reported in the same period in 2017.
According to a report from CBRE Panama, in the first six months of the year a total of thirteen Class B + and B sites entered the market, totaling some 47,000 m2of commercial space in Panama City. These projects registered an occupancy rate of 60.7%.As a result, average rents requested continued to decrease, with supply exceeding demand for existing available spaces.
A decline in the arrival of new international companies to the country could be one of the reasons behind the increase from 21% to 24% in the availability of office space in the Panamanian real estate market.
According to a report from CBRE Panama, total availability in the office market increased during the second half of 2017, going up by 2.5%.The document adds that the office market closed the second semester with a total inventory of 1,661,234 m2, after making some adjustments of surplus stock and a demolished building.
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.