Some of the biggest high-end brands are setting up shop in Panama City, in the latest step in the evolution of the capital as a luxury real estate destination.
The Burberry Group and Fendi are among the top-end luxury retailers opening stores in Soho Panama project, which includes a 120-store luxury mall covering an entire city block. The $360 million project, developed by Panama-based Westline Enterprises Inc., will also feature a Ritz Carlton hotel.
“The luxury market is just starting to gain a foothold in Panama, and there is still a lot of room to grow,” Westline executives told the Wall Street Journal this week.
Luxury brands are not new in Panama City – the Multiplaza mall, which went through a major revamping this year, features stores by Gucci, Dolce & Gabbana, Cartier and Salvatore Ferragamo.
However, the Soho retail mall and its luxury stores, which are scheduled to open in March, undoubtedly represent a major move forward in Panama City’s development as a luxury market. Our home base of Punta Pacifica, with its sleek waterfront towers and vast penthouse apartments, is part of a new trend toward luxury in Panama City. We’re seeing more and more high-end buyers in Punta Pacifica, who like that they can find all the amenities here.
The city has been known for years as the Miami Beach of Central America, but it is now reaching international standards, a status confirmed by the luxury brands. For example, the casino that opened in the Trump two months ago includes facilities dedicated to the top end high-rollers. The Trump is the luxury icon for the region, the tallest building in Central America, and it attracts luxury buyers and renters that might have passed up Panama a few years ago.
“Panama’s luxury-retail market partly reflects the country’s robust economy,” the Journal reported. “Government incentives and comparatively lower corporate taxes have lured hundreds of companies and investors to the country.” That list includes such big multi-nationals as Caterpillar and Dell.
A relatively low sales tax rate of 7 percent, compared to 16 percent in Colombia and 19 percent in Brazil, also makes Panama City attractive to retailers, the Journal reports.
“In both Central and South America, there is a highly sophisticated wealthy audience that has historically gone to Miami, New York, Paris and London to do their shopping,” Paco Underhill, chief executive of retail consultant Envirosell told the Journal. “They’d be happy to do it in their own market, particularly in Panama because of the tax structure.”
Westline is taking a long-term approach to the luxury market, the company told the Journal. And Westline expects foreigners to account for 30 percent of the shopping in the luxury mall, providing direct evidence of the growing international community that own and rent real estate in Panama City.
Duncan McGowan is president of Punta Pacifica Realty, a Panama real estate agency focused on Punta Pacifica, the exclusive neighborhood of 18 towers perched on the edge of the Pacific Ocean.