ALL IN ONE

Panama 2016 | CONSTRUCTION & REAL ESTATE | INTERVIEW

TBY talks to Fernando Céspedes, President of Grupo Céspedes, on current projects, the housing sector, and plans for growth.

Fernando Céspedes
BIOGRAPHY
Fernando Céspedes is an accomplished civil engineer executive with over 25 years’ experience in the construction industry. Céspedes is currently President of Grupo Céspedes, a corporate construction and real estate development company. His executive achievements include constructing over 1,500 telecommunications towers, 2,000 houses, and many infrastructure solutions around the country.

How has the portfolio of Grupo Céspedes changed in recent years?

When we first started, our core focus was mainly on infrastructure for government projects. Since then we have diversified into a whole range of services specializing in the construction industry and catering to all its necessities. Our business portfolio has shifted from a 60:40 government-private sector ratio to 80% private and 20% government. As a group, we have dedicated the last 20 years to improving the construction business in Panama, by raising its standards and offering better solutions to its every need. Our corporate group is divided into seven companies, offering a full range of construction, heavy equipment, engineering, quality control tests, appraisal, real estate, marketing research, and financial services.

What are some of your current projects?

As a construction company, we are developing a real estate project in Costa Linda, Juan Diaz for Bienes Raices Regency. We are also building the new warehouse for Grupo Primavera. Another project that makes us proud is the infrastructure of the Logistic Humanitarian Regional Center in Panamá Pacífico. As developers, we have an important project in Penonomé. After studying the market, we noticed that there was rising activity in Penonomé due to the mining industry, hotel proliferation, and the beaches. We detected an unattended need for affordable housing to host the labor force moving to the area. So last year we built 170 social housing solutions and this year we are building 500 more. We believe in Penonomé; therefore, we will continue to invest there.

How can the government incentivize investment in social housing in order to address the shortage?

The social housing market is very interesting, because there is always going to be a lot of demand. The problem is that developers do not bet on it, as it does not provide high returns. It requires a lot of knowledge in the buying and selling business, and any mistakes can be costly, making it a difficult market in which to survive in. The government has marketed the incentives of social housing well. The problem is that the process of getting the incentive back is very slow and bureaucratic. As a consequence, developers have lost faith in the incentives because it takes too much time to be able to count on it.

What are your plans for growth and what is going to drive the group forward?

We want to consolidate ourselves as a group and get people to know us and the wide array of services we can provide—as an appraisal company, as a real estate firm, and as a developer, not just as a construction company. We have been investing in other related activities for almost 50 years and recently added new companies and services to our group, always thinking in the best interest of our clients, coworkers, and the companies.

What are your expectations for 2016, and how will it compare to the previous year?

Overall, 2015 was a rough year, but this is not a reflection of the government. There is always a slowdown in the first two years following government transitions. We were expecting that and planned accordingly. I am still optimistic that we will have a good 2016. On the construction side, it will be our best year in about five or six years. This is what we have been working on and this year we are going to make it. For our appraisal company we have visualized new business opportunities, offering our services to financial institutions, brokers, law firms, and others. We are also widening our services portfolio with financial and quality inspections, a new line of business that we have not yet explored. There is a lot of competition in the appraisal sector, but we bring to our customers the fastest response, with innovative solutions and excellent service.