Services include day care for children, toy shops and hairdressing.

The supply of shopping malls in Escazú, San José, is diversified, this time with a small mall for kids.

The site, located opposite Mediplaza in Guachipelín, has 10 business shops in 1,200 square meters area and 100 square meters for parking.

The idea of opening a commercial center for children comes from Costa Rican businesswoman Sully Ramirez, who worked for decades in the business of florists in San José.

However, eight years ago, when the sale of flowers began to fall and competition proliferated, thought of an alternative project and teamed up with Panamanian businessmen.

“What better than to create something for children? We built this place with the form of train, with a party room, toy store, barber shop, video games, costumes, books and classes of fabric for parents and children, “said Ramirez.

Ramirez even thought of moms who need someone to care for their children. The business offers care for children in the party room Smiling Games (capacity 50 children), where six girls work and take care of the place.

Responsible for the shopping center did not specify the amount of the investment.

She added that despite the financial crisis, decided to continue the project because the niche that is new and ventured further, it was important to diversify their business in Costa Rica and the rest of the region.

While Avenida Escazú is unique in its concept of being a small city, is part of a series of individual developments that this city continues to build despite the ravages of the crisis in Costa Rica and other countries in the world.

Another project under development is Central Park, close to Avenida Escazú its developers believe will be an ideal complement.

It is marketed by IPL Group. Central Park is located in a field of over 50,000 square meters in which buildings are constructed condominiums; it is surrounded by forest, green areas with trails and five minutes from Avenida Escazú, Cima Hospital and Multiplaza.

The first tower is next door to be delivered and the second would be ready in early 2010.

Each building has 13 floors and will have space for 25 apartments. The condominium will have access to common areas like swimming pools, ranchos, and gym and tennis courts.

Mike Lukowiecky manager IPL Group commented that the pre-sale (the first two towers) is going very well.

“We have significant cash advances at over 60% which equates to more than 30 apartments,” he said.

They are currently negotiating further seven residential units, which would reach almost 80% sold, despite missing over a year for the second tower is completed.

Prices range between $1,950 and $2,200 per square meter, a price aimed at customers with high purchasing power.

A third project in Escazú is Riverwalk, a mix of commercial, office and a hotel of 150 rooms, managed and conceptualized by Mega Developments, firm owns Paseo de las Flores and International Mall.

But before an attractive offer, decided to sell it in its entirety.

This was confirmed by Jose Gerardo Chavarría, president of Mega Developments. “Someone came forward to buy and we are very close to closing a negotiation,” he said.

Chavarría recognized that with the advent of the crisis, banks changed their policy and the project was not funded. Says that the new owner is a group with a strong and robust portfolio of resources.

The city also hopes the fifth stage of Multiplaza.

Cover some 90,000 square meters of construction and will trade, restaurants and parking area.

As a new house the first store to be occupied by Siman 11,000 square meters, said Elisa Rojas, marketing manager Grupo Roble.

The strong growth of constructions in previous years already has a consequence in the real estate market: the oversupply of premises and offices.

Since March 2008, the sectors of office, commercial and industrial show an increasing trend in the percentage of available space, according to Colliers International.

Office buildings within the metropolitan area have increased from 7% of its area available to 11% in March.

One of the main reasons is that during the past year were ready several buildings whose construction began before the crisis.

However, with two quarters of unemployment above 10% and an increase of 2% in the number of buildings, new complexes failed to achieve in the market enough tenants to fill their apartments.

Additionally, with the reduction of staff that has made some companies, there is also now the possibility to reduce the space used for offices.

Antonio Pérez, general manager of Multifondos, who owns several buildings in their real estate investment funds, confirmed that the country has an oversupply.

For Pérez, this situation will last for several months, because the number of square meters available exceeds the demand.

Pressure on prices

One consequence of this property behavior, will be a pressure on prices, either to keep them unchanged or forcing a decline, said Pérez. According to the executive, offices are likely to have a greater decrease in the value of rents because their tenants have a lower cost if they decide to relocate.

Would be different for an industry as the move would mean the cost of mobilization of machinery and for a trade, the change of location could mean a drop in sales.

Armando Maroto, manager of real estate funds of Aldesa Group, agrees that rental prices will go down.

One possibility, he added, is that companies negotiate with owners of buildings temporary reductions in income, for example, for six months and then increased again. The measure would be to avoid the loss of tenants.

Maroto explained that the effect of prices would have two strands. The first for new buildings, which shall make their initial offers with the lowest levels for the market.

The second is for Oficentros already established, that could cause slight declines, or maintain rents unchanged in the coming years.
Carlos Phillips, manager of business Interbolsa, is more reserved.

He explained that a drop in prices would be flat and if the crisis hits more severely to the companies, what would happen is that these would be forced to migrate to a building with fewer amenities.

According to Phillips, in the Costa Rica Real Estate news investment funds, it is possible that prices do not have a strong downward pressure on the excess, if the respective fund has a sufficiently diversified portfolio.

This way, if the tenant asks for a lower price or leave the building, portfolio management could assess the weight that is within all property and if it is relatively small, would deny the option of lowering rents.

For now, investment funds look to slow down construction activity, but without a full stop, as would the risk of lack of supply when the economy revived.