Panama's Office Market Shows Significant Recovery, According to Study - Expat Community

Panama’s Office Market Shows Significant Recovery, According to Study

Nov 24, 2023 | News & Articles, Panama | 0 comments

As of September 2023, the inventory of the office market in Panama City reached 1.7 million square meters of total leasable area.

 

The average listed rental price for the third quarter of the year was $14.54 per square meter per month.

 

Economic stability, foreign direct investment (FDI), and the absence of new developments have been synonymous with transition and recovery for the office market in Panama City in 2023.

 

Market availability stood at 25.18%, a figure that, although still indicating oversupply, represents the most significant decrease since 2018, according to the third market report by experts from Newmark Central America.

 

The document states that the notable recovery in 2023 is due to the stable and consistent economic growth of the country, providing a solid argument for the expansion and consolidation of operations in the tertiary sector for the medium and long term.

 

On the other hand, it emphasizes that more and more companies recognize the importance of creating more comfortable and efficient work environments that enhance the productivity and well-being of their employees.

 

“The growth of FDI in the country, as well as the requirements for relocation, consolidation, and expansion of operations by multinational firms in the service and digital technology sector, project a market trend towards recovery and the search for cyclical balance, but with significant delays in decision-making,” explained Danny Quirós, marketing researcher and director of Newmark Central America.

 

Key findings

By the end of September 2023, the inventory of the office market in Panama City has remained at 1,783,179 square meters of total leasable area, showing no growth since late 2018.

 

Precisely, this lack of new supply, the accumulation of demand, and the motivation of owners to occupy vacant spaces for several years justify the recovery in availability, according to the report.

 

The average listed rental price for the third quarter of the year was $14.54 per square meter per month, while the closing price was $14.35 per square meter per month, following negotiations.

 

According to Danny Quirós, this downward trend is justified by the excess available supply and the motivation of owners to occupy vacant spaces for several years. “It is expected that current prices will increase in the coming quarters, considering the recovery of economic activity and the arrival of new companies to the country and the expansion of existing ones,” said the company representative.

 

What is needed to attract more demand?

According to experts from Newmark Central America, it is essential for office owners and developers to consider aspects that were once optional and are now indispensable.

 

Collaborative designs, studying tenant preferences through data analysis, world-class connectivity, sustainable spaces, and a challenging level of customization in interior design and prices are just some of the essential elements.

 

They also recommend offering additional services and amenities such as gyms, cleaning services, cafeteria areas, secure parking, and rest areas to make the space more attractive, as these are expected by clients.

 

On the other hand, they indicate that high-speed connectivity and strong technological infrastructure are essential. Companies need assurances that they can meet their technological needs, from Wi-Fi connection to advanced security systems.

 

“The pandemic has highlighted the importance of health and well-being in the workplace. Offering high-quality ventilation systems, natural lighting, and access to outdoor areas are among the most frequent requests,” Quirós commented.

 

According to the report, location remains crucial because well-located office spaces easily accessible by public transportation are more attractive to tenants today.

 

For the company, this context also opens the door for owners of second-generation buildings (spaces that have already been used by another tenant, have been vacated, and are now vacant) to attract tenants with better prices, location, and flexibility.

 

LaEstrella.com.pa – https://www.laestrella.com.pa/economia/231124/mercado-oficinas-panama-registra-notable

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