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Forty percent of Latin American container shipping passes through the Panama Canal. Panama expects a ten percent increase in container shipping volume in 2009 versus 2008. Panama is expanding its port facilities and China Ocean Shipping, owned by China, would like to build a new port on the Pacific entrance to the Panama Canal. Looking at Panama's continuing growth and development we believe that commercial real estate investment holds great promise in Panama for years to come.

Panama and the Panama Canal

Panama is the narrowest part of the Americas and thus the site of the canal connecting Atlantic and Pacific Oceans. The 50 mile long Panama Canal was built at the beginning of the 20th century by the United States who passed ownership and management to Panama in 1999.

The Panama Canal Authority is currently in the early stages of an expansion of the Panama Canal which will double shipping capacity in a few years and allow passage of ships which are now too large to fit the Panama Canal locks.

Panama Canal Infrastructure, Container Shipping and Real Estate Investment

According to Reuters (September 12, 2008) Panama expects to see a ten percent increase in shipping volume in 2009 despite the US economy cooling off. An example includes the projected increase in the number of twenty foot shipping containers handled by Panama's ports from 4.1 million in 2007 to 5.6 million in 2009. This is a 36.6 percent increase in two years.

Reuters quotes maritime authority chief Fernando Solorzano who says that, "Latin America faces a great challenge because maritime transportation is growing at an accelerated rate, and so we must create infrastructure that can meet existing demand." We believe the investment Panama makes in its infrastructure will create more opportunity for related private investment in Panama.

Although much of the infrastructure will be government directed we believe that there will be ample opportunity of real estate investment in Panama tied to Panama's need for storage, loading and unloading facilities, docking facilities, and equipment and maintenance facilities.

The Panama Canal Zone and Commercial Real Estate Investment in Panama

The United States built, operated, and defended the Panama Canal from the start of construction in 1906 to its handover to Panama in 1999. As part of the treated governing the US use operation of the Panama Canal land for five miles on either side of the canal was US property, the Panama Canal Zone. For years the US used this property for jungle warfare training as well as for canal maintenance. Otherwise it was left alone. Since Panama has taken over it is developing the old Canal Zone with canal support facilities as well as a whole host of other types of business development.

There are still real estate investment opportunities in the old Panama Canal Zone and there are still investment opportunities to tie into Panama's growing infrastructure needs. From Latin American training facilities for international corporations to office complexes, to storage and repair facilities there are opportunities to develop and lease long term. Commercial property investment along the Panama Canal will tie into Panama's continuing economic boom and growing prosperity.

For questions regarding Panama's real estate investment opportunities contact us at ABPanama. We have more than 23 years experience managing real estate portfolios and would be please to help you invest in Panama's and your future.