Right now, Panama is building a cruise ship pier at the Amador Causeway in Panama City…
It’s erecting a fourth bridge over the Canal…
Laying track for a train from Panama City to David that will carry cargo and passengers…
And digging tunnels for the next line of the Panama City metro.
But all those big-deal infrastructure projects pale in comparison to another getting underway in this country’s interior.
Indeed, even the recent expansion of the Panama Canal doesn’t compare in scope and potential to what’s going on right now in Coclé Province.
And almost nobody is talking about it…
In February of this year, Panama began work on building what will be, when it’s fully operating, the world’s largest copper mine.
The first shipment of copper from the new mine was sent out in June. However, there’s still a lot of infrastructure and development to bring online to make this project what it is intended to be.
At least 10,000 employees will be required during the construction phase of the mine, then more than 2,500 will be needed for ongoing operations.
The mine is expected to have a minimum 34-year lifespan, but it likely will continue operations beyond that time frame. All of that is interesting in the context of Panama’s economy and investor prospects in this country. But what about us global property investors, in particular?
The opportunity for us real estate types comes from the housing demand being created by all those workers.
A majority will be Panamanian but not all. Many will be highly and specifically trained employees of the mining company. These kinds of workers are typically assigned to a project for two or three years before being rotated to an operation in another country.
That is, these managers and executives are not moving to Panama permanently, so they almost certainly will rent a place to live rather than buying.
Additionally, the mine has rules related to housing. Most employees are required to live within an hour of the entrance of the mine, and the mine is in a remote, completely undeveloped region.
This means mine workers really have only one option for where to settle—the town of Penonomé and north along the road from that city to the mine.
Another restriction prohibits private vehicles in the area of the mine.
The equipment used in a mining operation like this one can be as big as a house… a two-story house in some cases. The tires on the dump trucks, for example, are taller than an SUV (not taller than the tires on an SUV… but taller than an SUV), which means limited visibility on the ground. Workers must be bused to the mine site from a central transportation hub. This hub is part of a larger community that the mine is working with a developer to master plan and then build out.
Essentially, the plan calls for a town (that will start with the transportation hub), a hotel, commercial space, and condos.
These condos are the play I want to bring to your attention.
You can own one of these and rent it out to the relatively well-paid market that will be the mine workers.
Typically with a rental property, you’re at the mercy of tourist volume or local housing conditions. With these condos, you have a captive market.
Sure, the mine workers could rent houses (or even buy) in the distant town of Penonomé, but the rotating workers are going to want modern accommodation near to work with amenities like parks, schools, and shops.
Bottom line, they’re going to want a living standard a full step above what is generally available in this part of the country right now.
That’s the vision behind the community being developed here. The condos won’t be typical worker housing. These will be nice, comfortable places, competitive on the international market. And, living in one of these condos, workers will be able to walk everywhere they might need or want to go. All buildings will be two or three stories, making the build times quick.
The first building will get underway when 40% of the units are sold… which amounts to 8 of the 17 apartments. The second and third buildings will follow immediately. Condo sizes will range from 40 to 57 square meters in the first building, with some larger apartments in buildings two and three.
The first eight units in building one should go quickly, as the developer is offering a 6% discount on the first 10 condos to kick things off.
You can buy with 50% down and finance the remaining 50% for three to five years.
If you get one of the first 10 units at the 6% discount, you’re looking at a purchase price of US$105,000… and a cash requirement of US$52,500 if you go with developer financing.
The developer is projecting a net rental yield between 8% and 10% at these discounted prices.
Keep in mind that, while the mine has a 34-year or longer life expectancy, the region is expected to grow strongly thanks to the boom that this mine project will bring. Furthermore, the newly elected President Cortizo is expected to double down on investment here as part of his administration’s goals.
In fact, this region of Panama likely will see more overall growth than any other in the country outside the capital over the coming 5 to 10 years.
I’ve been investing in Panama for more than 20 years and living and running a business in this country for more than 11. Based on long and broad experience, I want to underline this point:
This is the biggest opportunity to come out of Panama in decades.
The Panama Canal currently generates US$2 billion in revenue annually… about US$800 million of which goes into Panama’s General Treasury each year. That’s a huge level of cash flow for a country this size with a population of 4 million people.
And now, when this mine is fully operational, that cash flow is going double. In other words, Panama will have twice as much money for infrastructure and education initiatives. Twice as much money for health care and rejuvenation efforts.
This is a really big deal for this country… and a really big chance for you to get in on the ground floor of an opportunity that I believe will be remembered as the second most significant in the history of Panama.
There’s a lot of money to be made here… including for us investors.
By way of full disclosure, Lief and I are looking to invest ourselves.
We’ve been working with the developer behind this investment for 20 years. He’s solid. We’re in.
You can get in touch here for more information.
Kathleen Peddicord
