Latin Real Estate Boom

Latin America's real estate sector is booming, thanks in large part to a growing number of US retirees buying homes. Panama, Mexico and Costa Rica are leading the way, but also Argentina is seeing a boom.

Donald Trump is busy these days. Apart from running his real estate empire and planning another reality TV show, he is preparing to develop a 62-story hotel and apartment tower in Panama City, Panama.

The planned Trump Ocean Club International Hotel and Tower will feature more than 300 hotel rooms and 500 luxury apartments as well as a casino, yacht club and its own private beach.

But Trump isn't the only one developing highrise towers in Panama. "In Panama City thereare new skyscrapers going up all over," says Robert Baker, president of the American Chamber of Commerce in Panama.

Panama is seeing unprecedent interest from U.S. retirees, partly asa result of positive media coveragein Conde Nast Traveler and magazines published by the American Association Retired Persons (AARP). And CBS filmed three Surivivor series in Panama, more than any other country, Baker points out.

Panama is one of three real estate markets in Latin America seeing heightened interest, according to Rogerio Basso, Latin America real estate specialist at US-based consultancy Ernst & Young.

"In general, markets that provide a good combination of air lift from major destinations, proximity to key source markets and coastal locations are experiencing explosive growth," he says. "In discussions with our clients and the investment community, we are observing that there is heightened interest in Mexico, Costa Rica and Panama."

NEW STANDARD
The Trump project, with a total cost of $220 million, will start in the second half of the year and be ready by 2009. Construction firm Arias Serna y Saravia SA and real estate marketing company Espacios Urbanos S.A., both from neighboring Colombia, are also involved in the new project.

"With this development we will set a new standard of luxury in Panama," Trump said in late April. "The Trump Ocean Club, International Hotel & Tower, will be a magnificent and distinctive contribution to Panama City, one of Latin America's most dynamic cities."
Meanwhile, Panama City has also seen a race between two rival projects aimed at becoming the tallest building in Latin America. The 104-story residential and hotel building, Ice Tower, is slated to be completed in 2010. The building is being developed by F&F Properties LTDA., Inc, from Panama, while the design is being done by local architecture firm Pinzon, Lozano & Asociados.

Spain-based Olloqui Group is constructing a 93-floor building, Palacio de la Bahía, located on the Bay of Panama. It is expected to be finished in 2009 and is being designed by local architect Jesús Díaz & Asociados. The two projects were originally smaller, but subsequently started adding floors to obtain status at the tallest building in the region.
And Grupo Mall, another Spanish developer, is building a multitower center of apartments, hotel and commercial mall. The project, scheduled for partial completion in 2009, is designed by UK architect Chapman Taylor LLP.

And the real estate boom isn't only limited to the capital. The K Group, Trump's local partner on the new tower, is also developing Emerald Bay on Isla Contadora and Coronado Country Club Resort, a major development consisting of 300 apartments and houses, near the main tourist areas of Panama. A new project similar to the Miami Seaquarium is going up in San Carlos and even the Wal-Mart heiress is looking for land in Panama, Baker says.

European real estate investors are also developing luxury beach front villas in the Azuero Peninsula, Isla Viveros in the Pearl Islands and Montañas de Caldera near Boquete, according to the International Herald Tribune.


"You have a real boom going on here," Baker says. "Land prices are going up fast and some of the big condos in the city are increasing in price by $25,000 per month."

He expects the boom to last at least five more years, if not another decade. Apart from the existing demand, future developments will also be helped by such factors as the planned expansion of the Panama Canal, a planned refinery by U.S. oil giant Oxy and a new mega port near the Pacific entrance of the canal. Combined these will inject $11.8 billion into the Panamanian economy, Baker says.

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Insight: Eastern European chill in currency markets

By Gillian Tett

Published: September 27 2007 17:38

A few months ago, Sveriges Riksbank – Sweden's central bank – issued a thought-provoking note on financial stability.

This pointed out that financial conditions in the Baltic region were becoming increasingly vulnerable to a market shock and noted that if this jolt did occur, one victim could be the Scandinavian banks.

Indeed, the Riksbank was apparently so uneasy that it named and shamed two of the most vulnerable banks (Swedbank and SEB), an unusual move in central banking terms, as Absolute Strategy Research, a think-tank, observes.

Why invest in Barbados - Factsheet

About Barbados

Barbados is an independent English-speaking Commonwealth country with a dynamic economy. The most easterly of the Caribbean islands, it is just over three (3) hours by plane from Miami, four and one-half (4 ½) hours from New York and eight (8) hours from London. Barbados is today a world class business centre, with the professionalism of management necessary for the continued high level of business and social development. With its modern infrastructure, Barbados is an ideal place to live, work and invest.

Business Environment

Barbados has an economy driven by tourism, business, financial services, agriculture, and manufacturing. Low tax rates, double taxation agreements and exchange of information treaties have provided Barbados with an ideal environment for its development into a major international business and financial services centre. In addition, Government has a liberal policy towards foreign exchange controls and is committed to moving towards the elimination of these controls.

The island is highly rated for the quality of its educational, social and healthcare services and continues to enjoy stable political and labour relations. The availability of daily scheduled air transport to major international cities in North America, England and Europe and ready access to telecommunications, power, water and other utilities make Barbados a place at works.

Looking towards the future, the National Initiative for Service Excellence, NISE, was launched in 2004 jointly by the trade unions, the private sector and Government to position Barbados to consistently deliver excellence in service in all aspects of business and social interaction. In this way, an enabling environment will be created within which Barbados will be able to attain its vision of being a developed country by 2025.

For more information visit http://www.nisebarbados.org/

Legal System

The legal system is derived from English common law and Statutes. The courts administer the laws of Barbados which consist solely of local legislation. The judicial system is composed of a lower Magistrates Court and the Supreme Court which includes a Court of Appeal and a High Court. Final Appeal from Barbadian courts is to the Privy Council in England.

Taxation

Companies and individuals who are resident and domiciled in Barbados for tax purposes are subject to income tax on their world-wide income whether or not income is remitted to Barbados. Individuals who are resident but not domiciled in Barbados are taxed on their income derived from Barbados and on any overseas income remitted to Barbados. Non-residents are taxed only on income derived from Barbados. With certain exemptions (e.g. financial services and the sale of real property), Value Added Tax (VAT) is levied on all goods and services produced in Barbados and goods imported into Barbados.

Economy

Barbados has a market based economy. Over the last four decades, the economy has shifted from an emphasis on agriculture towards the provision of services. The economy is now based on tourism, business, finance and general services, agriculture and manufacturing. Over the years, Barbados has achieved a relatively high per capita income under conditions of low inflation, low external indebtedness and a solid social and economic infrastructure.

Infrastructure

Transportation

Barbados has an extensive road system of about 1475 km. of paved roads which have undergone major improvement in recent years. A highway links the north and south of the island.

The Grantley Adams International Airport, located about 15 minutes from the capital city Bridgetown, plays an important role as a vital center and link for international air traffic in the Eastern Caribbean. The main passenger terminal handles in excess of 2.0 million passengers each year and it has been recently upgraded and expanded .There are non-stop daily scheduled airline services to the major international cities – New York, Miami, Toronto, London – as well as to other Caribbean islands. Airlines flying to Barbados include Americam Airlines, American Eagle, Air Canada, Air Jamaica, British Airways, Caribbean Star, LIAT, Virgin Atlantic, US Airways and also British West Indian Airways (BWIA), to be replaced by Caribbean Airlines effective January 1, 2007.

The Seaport at Bridgetown is one of the most modern ports in the Caribbean with both a deep- water harbour and a shallow draught facility. There are regular freight sailings to North America, Europe and the Caribbean. The Bridgetown Port is well equipped with container-handling and berth facilities for ocean-going freighters and passenger vessels, including major luxury liners. It has won the prestigious award of “Caribbean Port of the Year” on several occasions during the last ten years.

Utilities

Barbados is equipped with a modern telecommunications infrastructure with the latest in digital technology and fibre optic systems including international direct dialing, facsimile transfer and satellite telecommunications which allows for the efficient transmission of electronic data. Internet and e-mail services as well as express mail and courier delivery are also available.

A reliable supply of Electricity is provided by the Barbados Light and Power Company Limited. Domestic and commercial supply voltage in major residential areas and in all new developments is 115/230 volts 50Hz. In Bridgetown and some other areas, the supply is 115/200Hz.

The Barbados Water Authority, a government statutory corporation, is the sole provider of water services. The water service in Barbados is reliable and the water supply is safe and refreshing to drink.

Geography

Barbados is located at latitude 13 degrees North and Longitude 59 West and is the most easterly of the Caribbean chain of islands that stretches from Florida on the North American mainland to the Guianas on the South American continent.

The island is just 21 miles long and 14 miles wide at its widest point and is made up of soft coral lime stone which is responsible for the gently rolling landscape. The terrain rises in steps from the west coast, reaching its highest point of 1100 feet at Mount Hillaby in the eastern parish of St. Andrew. The island is fringed coral reefs which is responsible for the white sand beaches that are present along the coast line.

The capital city, Bridgetown, and the three other regional towns are located along the west coast or Caribbean side of the island, while the Atlantic coast on the east side is less densely populated. The Barbadian population is predominately of African origin, while people of European, Indian and other ethnic groups are represented among the 273,000 persons live on the island of 166 square miles.

Barbados enjoys a pleasant and stable climate with daytime temperatures ranging between 31 and 23 degrees Centigrade. There is a dry season from February to March and a definite wet season between July and November. Although the island lies in a hurricane belt it has not suffered a direct hit since 1955. Natural resources include oil, natural gas and fish.

Government

Judicial, political and administrative institutions are closely modeled on the British system.

All political parties are “middle of the road”, supportive of the free enterprise system, and committed to the rule of law.

Barbados has had representative government since 1639 and became an independent country in 1966. There are two houses of Parliament, an elected House of Assembly and a nominated Senate. Executive authority is vested in the Prime Minister and Cabinet who are collectively responsible to Parliament.

Elections are held every five years.

Government actively encourages foreign investment.

Solid leadership has served this 166 square mile island well, maintaining its political, economic and social stability. This stability is underpinned by the existence in Barbados of the third oldest Parliament in the British Commonwealth. From the very beginning, Government’s policy has shown a firm commitment to the social and economic development of the island. The Government of Barbados therefore fully supports inward investment and ensures that appropriate incentives and legislation are in place to give confidence and predictability to investment decisions.

//www.barbadostourisminvestment.com/