By: Luigi Bemporad – Chair of the Real Estate and Construction Committee / Associate Director – NEWMARK
Since the post-pandemic economic recovery, Panama has reaffirmed its appeal as a destination for foreign investment in real estate. Its strategic location, the Canal, and a competitive financial infrastructure continue to attract U.S. and global capital. The landscape has evolved, however: investment flows are now concentrated in specific segments and the risks to be assessed have changed.
We find opportunities in: premium residential and mid-market housing, with demand for high-quality properties in urban areas and for projects offering amenities and security. In parallel, there is a growing need for affordable housing, driven by internal migration and the recovery in employment. We also see opportunities in flexible offices and coworking; the shift to hybrid work has created interest in smaller spaces of higher quality with more services, which favors flexible developments and coworking operators focused on multinational companies. We can see opportunities in logistics and industrial, where the boom in e-commerce and Panama’s logistics position are driving demand for logistics parks, distribution centers and warehouses close to the ports and the airport. There are also tourism and hotel projects, where an increase in tourism and the promotion of Panama as a MICE destination (conferences and events) are reviving opportunities in hotels and resorts, especially with foreign capital seeking diversification.
Risks and challenges
Regulatory risk: although Panama maintains a favorable framework, changes in taxation, environmental regulations or land use can affect returns. It is essential to monitor legislative initiatives and to have local advisors.
Rate and financing volatility: swings in international interest rates affect the cost of financing and liquidity. Investors should assess combinations of local and international financing along with stress scenarios.
Market risk: oversupply in specific segments (e.g. traditional offices) and periods of vacancy can erode returns. Up-to-date market studies are indispensable.
Construction and supply chain risks: increases in material costs and post-pandemic logistics delays call for clear contractual clauses and proactive schedule management.
Recommendations for American investors
Comprehensive due diligence: in addition to legal matters and titles, conduct market analysis, permit verification and environmental impact assessment.
Local partnerships: work with trusted developers and managers who know the market dynamics and Panamanian regulations.
Diversification by segment and location: combine residential, logistics and commercial assets in different areas to mitigate risk.
ESG approach: investing in projects with energy efficiency and sustainability improves valuation and access to international financing.
Panama offers attractive opportunities for real estate investment, especially in premium residential, logistics and flexible office segments. Navigating the environment, however, requires rigorous analysis, management of regulatory and financial risk, and experienced local partners. For AMCHAM members interested in diversifying within the region, an informed and adaptable strategy will be key to capitalizing on the potential of the Panamanian market.
