01/08/09

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International Briefs

Panama City

Europeans buying units at Morocco's resorts
European investors have already begun grabbing units at Morocco's Mediterrania-Saidia, which will be North Africa's largest luxury resort when it opens in 2010. Around 50 percent of the apartments sold there have been to British, Irish and Spanish buyers, according to the International Herald Tribune.

Located in the economically depressed Oriental region along the Algerian border, Mediterrania-Saidia will be one of six luxury resorts in the country's so-called Plan Azur developments, a $4.4 billion government plan to bring foreign investment and tourism into the country's poorest areas. The other five Plan Azur projects are on the nation's west coast.

In addition to the plan, there are more than 14 major developments underway at the juncture of the Atlantic and Mediterranean, near the city of Tangier.

Spanish developer Fadesa owns most of Mediterrania-Saidia, which will include 3,000 luxury apartments. Units there have sold for $210,000 for a 1,184-square-foot unit.

Hot Panama market may see cooling
Panama City, which has been advertised as the "Miami of Central America" for its incredible rate of economic growth, real estate appreciation and rapid building in the past couple years, might also be seeing the negative effects of overbuilding familiar to its namesake.

In the last two years, the average price of a high-rise apartment in the city has leapt from around $140 to around $280 per square foot, the International Herald Tribune reported.

There are 35 towers, each 20 stories or more, under construction, and another 350 such developments in preconstruction stages, representing a total of 40,000 planned units, according to government estimates.

But now the first signs of a cooling market have appeared, starting with cancellations of three of the city's largest projects last year, including the 104-story Ice Tower, which would have been the tallest tower in the city. And in response to complaints that a majority of current building investment there is speculative, a law passed last year will require developers to have at least preliminary government approval for projects prior to soliciting buyers.

Still, foreign investment in Panama was up 20 percent in the first half of 2007 compared to the same period of 2006. Construction activity increased 17 percent over this time.

Meanwhile, investment from the city government seeks to address its traffic and pollution problems, including long-term plans to build new roads and a seven-year, $300 million project to clean up sewage in Panama Bay.

Japanese townhouses see renewed demand
A renewed interest in the Kyo-machiya, a traditional urban Japanese townhouse built between the 1860s and the end of World War II, has recently brought a diverse herd of Japanese and international renters and buyers to Kyoto, where more than 20,000 of these homes exist, according to the International Herald Tribune.

The structures typically have little street frontage but extend far back from the street — they are an average of 17.5 feet wide and 65.5 feet deep. Although the old buildings are prone to tilting and insulation problems, construction techniques make them very resistant to earthquake damage or collapse.

An average sized Kyo-machiya in central Kyoto, around 540 to 860 square feet, would rent for about $935 per month in good condition. However, structural problems can bring rents to half that.

A fixer-upper Kyo-machiya typically sells for around $92,000, but could require up to twice that investment in renovations.