BRICKS & MORTAR

Panama 2014 | REAL ESTATE & CONSTRUCTION | INTERVIEW

TBY talks to Juan Carlos Sotillo Escala, Director General of Sotillo & Company, on the future of the market.

Juan Carlos Sotillo Escala
BIOGRAPHY
Juan Carlos Sotillo Escala is Director General of Sotillo & Company. He has worked in real estate for over 20 years, and has particular experience in sales, client relations, and construction industry strategy. He is a graduate of the Faculty of Architecture of Panama National University and holds a real estate brokerage qualification through the Ministry of Commerce and Industry.

What have the landmark achievements of the company been since it was incorporated in 2009?

The company was established five years ago when my partner and I, following years of working in one of the largest real estate companies in the country, decided to enter the Panamanian real estate market with our own company and focus on the business and commercial segments of the sector. We have over 14 years of experience in the real estate market as advisors, and have developed a team of expert advisors to offer the best opportunities for business. In this context, today 70% of the Panamanian commerce and business that want to expand their activities comes to us for real estate advice. The way we work is as follows; we meet our clients, we listen to their needs and requirements, and we search for what they need in terms of real estate properties. We also provide intermediation services to land owners who want to sell their land. In terms of future plans, we aim to enter the appraisals and administration of commercial properties segment to further complement our business and do it comprehensively.

What are the competitive advantages of your company?

We provide technical and expert advice to all the companies looking for real estate properties. This is based on our years of experience in this sector. For example, we also carry profitability studies to assess the potential return on investment. The personalized services we offer clients are among the core strengths of our company.

How many properties does the company currently manage, and which are the main ones you engage with?

At the moment, we have over 9,000 properties in our portfolio, including new constructions and second-hand properties. We have access to all the new construction projects being developed in Panama, due to long-standing ties with the main developers. We also have access to the inventories of foreclosed properties of the major banks and also represent several investment groups focused on real estate development, which maintain a current portfolio of commercial properties for lease only. Our main activities are to search and identify properties with potential for housing and commercial development, in addition to studying the growth plans of businesses to identify and propose new and potential sectors.

What opportunities, in your opinion, does Panama offer to real estate investors?

Panama sits in a strategic location and can serve as a logistics base, so we should be developing our logistics and transport infrastructure. The country has a lot to offer in terms of entertainment infrastructure. The real estate sector also offers opportunities aplenty in the housing segment, especially for the middle and lower income social segments.

How would you assess the economic performance of the company over the past year, and what are your near-term expectations?

We have experienced positive growth trends since the first day of operations; the annual average of the past four years is above 10%. This year we will not reach double-digit growth, but will be close to it.

Which key factors contributed to the 7% growth in demand for commercial offices in Panama over the past year?

One of the main factors has been the expansion of the Panama Canal. Demand for such properties has been far above 7%; however, we reached a point where we should be wary of the number of commercial offices already available in the market, as we may be seeing the beginnings of unwelcome oversupply.

What are the main challenges facing the Panamanian real estate sector over the next five years?

The expansion of the Panama Canal has attracted many foreign investors, and I believe the main challenge the country faces involves sustaining FDI levels, as this could ultimately compensate for a potential decline of local investment in the near future.