fDi Markets Newswire:

Home / Locations / Americas / Panama / Old Quarter breathes new life into Panama City

old quarter

With its central Old Quarter regenerated to Unesco world heritage standards, Panama's real estate market is looking to develop and upgrade the neighbouring districts of Santa Ana and El Chorrillo. Jacopo Dettoni reports. 

Just a few roads outside the picturesque Casco Viejo (the Old Quarter, also known as San Felipe and Casco Antiguo), the centre of Panama City looks different: neglected, run-down, left behind. Although the facade of some buildings scattered across the districts of Santa Ana and El Chorillo still betray hints of a past colonial glory, there is little left of their original charm. Most lie abandoned and out of context in the cement jungle that has surrounded them over the decades. 

There are, however, a few exceptions. The municipality has revamped the rich details of a kiosk in the middle of Santa Ana square, reviving its original architectural value and social appeal. A few blocks down the road, private developers are starting to build or renovate residential space along key roads such as Calle 15. While these may be isolated examples at present, local authorities and the real estate market are looking at them as a turning point for a long-awaited regeneration process that may replicate the successful revival of the Old Quarter over the past 20 years.

“The Old Quarter is done: land there has turned very expensive, which is why investors are buying estates with or without architectonic value beyond it [in the districts of Santa Ana and El Chorillo],” says Manuel Trute, head of urban planning at the city’s municipality. “In some cases, they are holding on to them to upgrade them, in other cases they are reselling them because there are already profits to be made there following the major upgrade works the municipality carried out in the areas.”

The heritage effect

The historic centre of Panama City is made up of three main districts: the Old Quarter, a small peninsula that contains the original walled colonial settlement established by the Spanish in the 16th century; and Santa Ana and El Chorillo, which historically developed as the outskirts of the Casco Viejo. Up until the 1990s their trajectories largely coincided as they all fell out of favour with urban planners and real estate companies, which preferred to look elsewhere to invest the massive financial inflows generated directly and indirectly by the Panama Canal and the country’s fast-growing financial sector, rather then undergoing costly regenerations.

When Unesco named the Casco Viejo a world heritage site in 1997, an intense urban regeneration unfolded as private developers stepped in, lured too by specific incentives, to bring back to life the dormant colonial charm of the area and turn it (though not without some tensions around gentrification) into a thriving tourist hotspot. About 20 years later, the Old Quarter is “the jewel in the crown” of the country’s real estate market, and one of the most expensive to buy property in in the whole country, says Fernando Díaz Jaramillo, head of Avaca, a local association that brings together local communities and real estate investors.

Out of about 800 properties located in the Old Quarter, some 400 have been upgraded, with 90% of renovations done by private companies. Overall, private investors have executed, or are committed to executing, regeneration projects worth about $650m, according to Avaca figures.

Out with the old

The buzz originating in all the bars, restaurants, hotels and shops of the Old Quarter is now moving beyond its original perimeter. “The regeneration push is extending further than the Old Quarter to Santa Ana and El Chorillo,” says Mr Díaz Jaramillo. “These are areas with much potential, and we can already see private developers coming in. Beyond the world heritage site area, regulations are looser and investment is already going into residential and commercial properties, as well as into cultural properties.”

The city government has also made efforts to regenerate some local landmarks. Among others, it upgraded both Santa Ana square and the Avenida Central, which used to be the main overland connection running through the isthmus before the construction of the Panama Canal. It also revamped an area synonymous with street merchants called Salsipuedes (with translates as “get out if you can”), whose name embodied for decades the social instability and safety issues afflicting the area. Besides this it is making the most of an ongoing decentralisation process to come up with a draft of a first development masterplan for the area.

“We designated it as a special treatment area, and we have to start managing its recovery. [Right now it is suffering from] deterioration, and there is much poverty and criminality. But the real estate market is already buying assets in this area,” says Mr Trute.  

A place to stay

The regeneration of the centre is proving attractive to investors from the hospitality industry, who are keen to retain a footprint in the city. One of them is Selina, a hotel-hostel company launched by two Israeli entrepreneurs that raised $245m in funding in 2018. “The Old Quarter’s regeneration is a fact – you can see it in the street and with all the ongoing development around the small city,” says Emilio Uribe, global business development director of Selina. 

“Today, it has the highest square per-metre price in the city, which makes it a really interesting place for real estate developers. With all this remodelling and regeneration, a lot of stakeholders have benefited [including] the local community. More offerings mean more jobs, which is a good thing for the local community. 

“The most important stakeholders, and those which the city cares about the most, are the tourists [who visit] the beautiful Old Quarter, enjoy the food and the colourful neighbourhood. Its historical contrast against a massive concrete jungle [making up the rest of Panama City] can be seen from the rooftops and viewpoints.”

Selina invested $2m to refurbish a building constructed in the 1970s right at the edge of the Old Quarter, transforming it into a 395-bed building that opened in December 2018. Others, such as local developer Conservatorio, are developing residential units along Calle 15. 

Public and private investment are thus coming together to trigger a mass redevelopment of the Santa Ana and El Chorillo districts. While Panama City is often referred to as ‘the Miami of Central America’ for the vertical skyline of its modern business district, its colonial city centre lies largely intact, in spite of years of neglect. As local authorities and real estate companies join forces to attract investment and reinvigorate the area, it could trigger a revival of the city centre’s architectural heritage beyond the Old Quarter, propelling the city into the future by recovering its almost-forgotten past.

This article is sourced from fDi Magazine
fDi Magazine

Global greenfield investment trends

Crossborder investment monitor

fDi Markets is the only online database tracking crossborder greenfield investment covering all sectors and countries worldwide. It provides real-time monitoring of investment projects, capital investment and job creation with powerful tools to track and profile companies investing overseas.

Click here to find out more about fDi Markets

Corporate location benchmarking tool

fDi Benchmark is the only online tool to benchmark the competitiveness of countries and cities in over 50 sectors. Its comprehensive location data series covers the main cost and quality competitiveness indicators for over 300 locations around the world.

Click here to find out more about fDi Benchmark

Research report

fDi Intelligence provides customised reports and data research which deliver vital business intelligence to corporations, investment promotion agencies, economic development organisations, consulting firms and research institutions.

Find out more.