The commercial real estate market in Panama is experiencing a stable recovery following the COVID-19 health crisis and is now entering a new phase of expansion, as per assessments by industry experts. At the close of the first half of this year, the total leasable area reached 1,473,105 square meters, reflecting a 0.41% increase compared to the same period in 2022. Simultaneously, the vacancy rate stood at 9.51%, affirming the industry’s vigor during this timeframe, coupled with a net absorption of 47,242 square meters.
Mixed-use projects are particularly thriving in this evolving landscape, with growing demand from customers seeking diverse options within a single location.
According to an industry observer, retail centers have adapted their spaces to attract a varied mix of tenants, setting them apart from other projects. For instance, malls have incorporated additional entertainment features like cinemas, bowling alleys, go-kart tracks, and even unconventional tenants like car dealerships. This strategic shift has led to positive outcomes, increasing profitability for lessors, driving higher foot traffic, and enhancing market competitiveness.
In terms of emerging trends in premises, there are four noteworthy client categories driving demand. The automotive sector is a prominent player, given the entry of new vehicle brands into the market. This influx has prompted established brands to reassess their locations and bolster their market presence. Similarly, supermarket chains are actively expanding, utilizing both large and medium formats to cater to consumers across urban and rural areas.
The food franchise segment is also making significant strides, venturing into interior regions with innovative co-branding concepts, including drive-thru facilities. Moreover, Padel courts, a sport gaining traction in Panama, are transforming underutilized spaces into occupied areas, leading to increased profitability for property owners and heightened foot traffic in their projects.
Regarding regional recovery dynamics, certain areas within the city center such as Calle 50, Ave. Ricardo J. Alfaro, Ave. Transístmica, Área Bancaria, and Costa del Este have demonstrated swift recovery. On the flip side, commercial demand has been slower in locales like La 5 de Mayo, Ave. Central, and Ave. Cuba, primarily due to the migration of brands to other central locations.
Preparations are underway for commercial projects in emerging zones like Brisas del Golf and the northern periphery. For instance, a strip center named Paseo Drive by Grupo Residencial is scheduled to open in 2024, and a new mall with a diversified tenant mix is set to consolidate offerings in the region. Additionally, the San Isidro Mall on the northern periphery, offering direct access to metro line one, is also in development and will provide convenience to customers alongside various commercial choices.
Looking ahead, projections suggest that the trends from 2023 to 2024 will revolve around entertainment. Malls are poised to offer customers a comprehensive experience by introducing features such as VR rooms, themed bowling alleys, go-kart tracks, ice rinks, theaters, and other unique components alongside the traditional offerings.
Understanding the intricacies of the Panamanian market might be complex, necessitating timely real estate guidance to mitigate investment risks. Observers stress the importance of seeking expert advice to comprehend tenant dynamics, gauge commercial demand, and capitalize on the tax benefits that Panama offers.