Investment

Investment in land and real estate in Chiriquí, Panamá

Coco Beach offers an exciting investment opportunity:

Coco Beach is an exclusive beach resort in Chiriquí, Panama (a 2,5 hour flight from Miami). You will invest in a beautiful private beach with a deep blue sea, incredible sunsets and miles of pristine waving palm trees.

Coco Beach offers 152 desirable beachfront lots for investment. The lots are fully titled and have safe en publicly registered ownership.

By investing in Coco Beach, you will invest in:

  • An exclusive beach resort
  • Significantly undervalued beachfront lots
  • Anticipated double value in 5 years
  • Property fully managed by US/European management
  • An emerging market
  • Guaranteed political stability

Investment in land and real estate in Chiriquí, Panamá

Fact: land values at Coco Beach are extremely competitive.

The following visualization shows a comparison of land values at Coco Beach to major competing areas. Please note the CB value reflects the average of beachfront and oceanview lots and includes the price increase of 5000$ per lot which took place the end of March 2019 and the price increase after the delivery of the lots. The graph below shows the cost of fully developed “ready to build” lots including infrastructure and all permits, registered in the public land registry of Panama.

Beach front lot price comparison in $/square meters (1 sq. m2= 1,19599 sq. yard)

Fact:
Lot values at Coco Beach have appreciated historically and are expected to show a positive trend (based upon actual lot sales. factual until 2018, trend from 2019 onwards based on value drivers).

$/square foot value lot value

Please note: we expect this rapid price acceleration as the value of beachfront and oceanview lots at Coco Beach will be influenced by the following main factors:

  1. Registration of the lots in the public registry of Panama in January 2019
  2. The actual start of construction which started on Coco Beach in 2018
  3. Increased building activity on Coco Beach in 2019 and years beyond
  4. Relative value. The value of beachfront and oceanview land remains cheap relative to other areas, even with the projected price increases.
  5. Prices will be raised by 16-20 % by the developer in 2019. 
  6. The price raises 5000$ per lot end of March 2019 and 5000$ with delivery of the lots have been communicated to the market.
  7. Continued strong performance of the economy, both in Chiriquí and Panamá. Note in this respect that the Panamanian economy has been the fastest growing economy in North, South and Central America.

Oceanview real estate, a good investment

You might be thinking: another investment sales pitch,…this is not the case, investing in land and oceanview real estate is in our view a great way to ensure a good return in the coming 5-10 years. Especially in developing and stable markets like Panama. Why? Because investing in oceanview and oceanfront real estate meets several very important investment criteria: the asset is in eternal short supply, it is unique and can not be replaced en in the case of Panamá, it offers great value.
 

What determines a “good” investment?

Well, that is a simple question but not an easy answer. First, a good investment has value, value means the investment is relatively inexpensive relative to a set of pre-defined criteria.
Value limits the downside of an investment and maximizes the upside. Secondly, the investment must have unique characteristics that can not easily be duplicated. Warren Buffett, a famous investor, calls this: a good investment must have a “moat”. Third, a good investment has value drivers that will be valid for a very long time. Fourth, an investment must be liquid. Fifth, a good investment offers sufficient control.
 

A couple of examples: bad and good investments

Bad: buying Apple in October 2018.
Many people thought Apple was a great investment until they suddenly lost 40% in 8 weeks between October 2018 and January 2019. And at the same time there was not even a single Wall street analyst that had a sell rating on Apple. What went wrong here? The point is: the I-phone is no longer unique and the entry point of the investment was wrong.  Apple had become an expensive one trick pony. It violated three characteristics of a good investment: value, uniqueness and long term value drivers.
 
Bad: most hedgefunds
Most hedgefunds underperform the index, while charging high annual fees. Hedgefunds have no “moat”, unless the unique characteristic is the hedgefund manager himself. They usually are not unique, and the value drivers will not be around for a very long time.
 

Good: buying land and real estate at unique locations.

How does the buying of land and real estate at top locations meet the above criteria of a good investment?
 
First of all, in any case two things are sure: first, land is in eternal short supply because the world population is growing rapidly, people are more mobile and more land is needed for food production which reduces supply. All these value drivers will not change. These are long term trends.
 

So land is in short supply, but another thing is sure as well: oceanfront land in a perfect climate in a safe country is in even shorter supply. Most people want to live in a safe environment close to the beach in a great climate if they can afford it.

Can you follow this logic? Now, let’s take it a step further: oceanfront and oceanview land in a country which is universally regarded as the best country in the world to retire must be in even greater eternal short supply. Yes, this country is Panamá, it is the best country to retire worldwide (see the ranking in International Living) and it has a limited supply of ready to build risk-free oceanfront and oceanview building lots, while demand is growing. Is demand growing? Yes, already 16% of Americans indicated that they are thinking of emigration and more than 10,000 Americans are retiring every day and many can not maintain their lifestyle. Unless they decide to move (a 3-5 hour flight) to countries like Panama, where they can lead a great lifestyle for less money. Currently we sell 40% of the lots and villas to Americans and 20% to Canadians.

Yes, you might say, but how about the risk that land in Panama is overvalued and that my timing is wrong? You might say: the values of oceanfront land in Panamá have already almost doubled over the last 10 years, isn’t it too expensive? The answer is no, it is not. Land in Chiriquí remains relatively inexpensive to other areas in Panama and oceanfront property remains relatively cheap relative to international standards. 

And you might say…but how about the investment rule that I should buy something unique that can not be replicated? Well, just visit Coco Beach and you will be convinced immediately that Coco Beach is a unique community at a great location. It is impossible to replicate Coco Beach as it is a unique beachfront development with risk free registered building lots and a 1 mile stretch of beach with beautiful palm trees, locked in between two natural rivers. Just go to Coco Beach and experience the beauty and magic of his location. All our visitors say the same thing, Coco Beach is beautiful.

Fact
Let’s now provide some more factual proof. Question: does Coco Beach real estate provide a good value?
 

Comparison of average condomium and villa pricings 2018 (Source CBRE/Encuentra24/Web):

   $/sq. Yard$/sq. Meter
Santa Maria upscale Panama CityApartmentCity25083000
Costa del Este upscale Panama CityApartmentCity25923100
Playa Caracol upscale beachfront (half an hour west of Coronado)ApartmentBeach16722000
Brisas Playa Las Lajas (45 minutes east of David)ApartmentBeach16722000
Coco Beach Mallol Villa Chiriquí**Villa excl. LotBeach11711425**
Miami upscale Coral Gables USAApartmentCity38234573
Miami upscale Brickel USAApartmentCity43095154
Miami average USAApartmentCity37604497
San Francisco upscaleApartmentCity915810953
Amsterdam EuropeApartmentCity44935375

** The Mallol villa is build on a lot of on average 1500 square yards (0,3 acre) or for those more familiar with the metric system on average 1290 m2. The cheapest lots cost 60000$ for an area around 0,3 acre/1290 m2 which calculates to 48$ per m2 or 42$/square yard for a ready to build oceanview lot.

** In order to compare prices please remember that the Mallol type 1, a 2 bedroom villa with an interior surface of 84 m2 costs 119000 $ exclusive the lot. Including the lot prices for the Mallol villa at Coco Beach start at 179,000$. A 3 bedroom villa costs approximately 10,000 $ more.

** Bottom-line: the pricing of the construction of the Mallol villa is extremely competitive. Basically you will buy a high quality villa including a great lot at a lower price than comparable apartment projects in the area (out of which Brisas Las Lajas is the only one at a distance of 2 hours from Coco Beach). Brisas Las Lajas basically only offers apartments, and there are no other comparable beachfront projects with villas in this area of Chiriquí, Coco Beach is truly a unique development.

Main value drivers

For more information about the value drivers in Chiriquí, please view the presentation below:

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