Tuesday, 1 December 2020

Panama Office Space: More Supply Than Demand

Empty office space in Oceanía Business Plaza in Panamá city. Photo: Kris Hudson/The Wall Street Journal
Empty office space in Oceanía Business Plaza in Panamá city. Photo: Kris Hudson/The Wall Street Journal

TODAY PANAMA – 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%.

The Wall Street Journal reports that “… Owners and investors in Panama now expect that low occupancy rates in offices and hotel rooms will extend over several years. Many predict that the booming economy of Panama will fill the void, but not for at least two years, or more. Others are watching to see if the owners start selling hotels at low prices and continue lowering office rents, which would mean lower prices for both travelers and tenants. ”

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“… The construction boom is also being driven by a practice in which investors buy flats in towers, which mitigates the risk for builders and provides abundant capital. However, it can also generate excesses in construction, which eventually harms investors returns due to vacant properties and drops in rent prices. ”

Source: The Wall Street Journal

Article first appeared on Today Panama

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