It's official, the new International Airport of Costa Rica will be a reality in 2027.
The new International airport will be located in the canton of Orotina in the province of Alajuela, 60 km from
San José and close to the central Pacific coast of Costa Rica.
This region presents the best conditions for a new, modern and performing airport with among others, the fact that, being at sea level, it allows planes to take off carrying more payload and to reach more distant destinations.
President Luis Guillermo Solís also signed an executive decree declaring that the acquisition of the private properties by the government is a matter of public interest.
➽ What does that mean in a point of view of investment?
➽ Is it the moment to jump in and be sure to get a maximum ROI?
Let's try to make a risk analysis of the situation.
Costa Rica, just like all other countries, has a big history of announced projects that never saw the light of the sun. Maybe some of you remember the Palmar Sur International Airport project some 10 years ago. It was announced to be open in 2010 and with an extension to a 10,000 feet runway in 2016. Nothing happened and many lost money.
A very similar situation today? Well not really.
In the Palmar Sur project, the numbers were really unrealistic. The first phase of the project was to have a facility for 50-passengers planes. The project had an estimated cost of 60 million USD. And from there the plans were to extend to accommodate an A380 Airbus plane in only 6 more years.
Palmar Sur is 250 km away from San José. What is the need for such investment so far away from the economic and politic center of the country?
The whole Orotina Airport project is much more serious. The study was performed by British firm Mott MacDonald, who has no intent to produce a fake report and kill their reputation. The estimation for the whole project reaches de 3,5 billion USD which is, of course, more realistic than in the Palmar Sur project.
There is also a real need to replace the actual Juan Santamaría Airport of San José. There is no room for a real expansion of the airport facilities and no possibility to make longer runways. The airport is slowly but surely heading the saturation point. The only alternative solution is a completely new airport.
2018 will be a year of elections in Costa Rica. Will there still be a political will to go ahead with the project? Also the international situation, in the case of major collapse, could put a stop on the project.
All by all, the situation is not very different than for every major project in whatever country. The whole project passed a very serious study. There is a real political will to promote the project. If things go further, in the same way, the project will become a reality.
Depending on what type of investment you are looking for, there are several possible scenarios.
For the moment, sellers haven't changed their asking price. Sellers that have their property already on the market, really want to sell, regardless the airport becomes or not a reality. You still can buy great pieces of land (20, 50, 100 hectares) for prices between 4 and 8$ per square meter.
As the price for land tends to appreciate continuously, buying today, and if nothing happens, means you can resell the land with a nice bonus in between 5 and 10 years.
If you just want to take a chance to make money on the resell, 5 or 10 years to double the price is the worst situation. If the airport is coming out, in 2 or 3 years you can probably resell the land for 2 or 3 times the actual value.
If you have a real project (building a condominium, hotel, …) buying today is not a bad idea. Preparing the whole building project and obtaining all the permits can take 1 or 2 years. If you have all the permits ready by the time the airport construction starts it will be a real relief. It could happen that getting permits once the airport construction starts becomes a nightmare. I can easily imagine that all the concerned services will be saturated with demands.
Observing the evolution of the country for the past 10 years, I'm confident that the airport will become a reality. But still, in the best case it will take at least 2 years to see a real change but in that case, after that things will move quickly. If you are ready at that moment you will have the payback for your risk taking.