Rush for office space in Metro Manila continues in Q315

Premium and Grade A office space takeup in Metro Manila's main business districts (CBDs) continued to accelerate in Q315 due to strong pre-leasing activity, according to the most recent Office Briefing published by Savills international associate KMC MAG Group, a Philippines real estate services firm.

More than 200,000 sq m (232,961) was newly delivered in Q3, and almost everything was snapped up, at 231,412 sq m - a record takeup rate. 

"Most of the new spaces delivered have been pre-leased prior to completion; that is why takeup is very high," said Michael McCullough, KMC MAG Managing Director.

Upcoming supply is estimated to reach around 1.8-million sq m in 2018. Despite the significant amount of supply, KMC MAG says that overall office rental and vacancy rates are expected to remain stable given the strong pre-leasing activity.

"We continue to see interest from both local and foreign firms across all CBDs, although most of the interest is currently in Bonifacio Global City (BGC) only because it is where most of the new supply will come from," said McCullough.

"The profiles of companies who have pre-leased or are currently pre-leasing space vary across all CBDs. Ortigas, Bay Area, and Quezon City are very attractive to new IT-BPO firms who are just starting to outsource services and processes to the Philippines because of the lower rates.

"Makati remains the CBD of choice for large-scale enterprises who want to upgrade their headquarters and move to a better location, however many firms are forced to look towards BGC due to the lack of available and suitable space."

Thanks to the sustained IT-BPO industry demand and the relatively low level of new supply in these areas, Bay Area and Quezon City are projected to have the lowest vacancy rates and strongest rental rate growth among the business districts within the next 12 months.

In Q3, the Bay Area recorded a 17% year on year (YoY) rental rate growth, with Grade A rentals averaging from Php673.4 to Php700 per sq m/month and an ultra-low 1.3% vacancy rate.

Meanwhile, Quezon City posted an 8.5% YoY growth, with average Grade A office rates ranging from Php700.4 to Php750.0 per sq m/month. Located in the northernmost part of Metro Manila, Quezon City boasts vacancy rates of under 1% with only 0.2% of its total stock unoccupied, making it the best performing CBD in the country this quarter.

Makati, on the other hand, remains as the premium CBD, posting a 4.3% YoY growth with the highest asking net Grade A rental rates averaging Php 979.1 to Php 1400.0 per sq m/month. In spite of this, Makati's vacancy rate remains low at 3%, and is likely to become lower once Tower 6789 becomes fully occupied.

BGC comes in next, with a rental growth of 3.7% YoY and an average asking rental rate of Php860.4 to Php1,100 per sq m/month. The district's vacancy rate increased slightly to 2.6%; however, it should be noted that this is because it has absorbed most of the new demand, allowing it to post its highest recorded quarterly takeup since Q114 of 49,639 sq m.

Ortigas' growth remains strong at 6.8% YoY, bringing average rental rates up to Php624.6 per sq m/month, with an upper rate of Php750 per sq m/month. Ortigas' strong rental growth is expected to continue, given its current 2.5% vacancy rate and lack of new supply until the end of 2016.

Alabang is the only CBD office market with sluggish growth. YoY growth was 0.6% and vacancy rates 16%. This brought down the average asking rental rates to Php 605.3per sq m/month in Q315 from Php601.8 per sq m/month a year ago.

Interested?

Read the report (PDF)

Smaato highlights key role of emerging markets in mobile advertising

Source: Smaato.

Smaato, the global real-time advertising platform for mobile publishers and app developers, has released its Q315 Global Trends in Mobile Programmatic Report. Smaato analysed data from billions of mobile ad impressions served on its exchange during the third quarter of 2015 to reveal massive growth in Asia Pacific. Indonesia grew by 84% in the third quarter, outlining the next frontier of mobile advertising for publishers and advertisers in Asia Pacific.

While the strongest regions on the Smaato platform remain those with highly-developed mobile, advertising and commerce infrastructures and those with large populations and a mobile-first mentality such as India, Asia Pacific is new to the list of leading regions. This comes as a result of rapidly developing mobile networks and a proliferation of smartphones, which have combined to create a wealth of opportunities for mobile publishers and advertisers on the Smaato platform.

“As the world gets more connected, it’s never been more crucial to go global with your mobile advertising strategy,” said Ragnar Kruse, CEO and co-founder of Smaato. “India, with its massive, mobile-first population, has long been considered the ‘next big market.’ While India remains a growing powerhouse, our data also shows that countries like Indonesia and Brazil are up-and-coming markets in Latin America and Asia Pacific - and offer incredible opportunities for publishers to monetise, and for advertisers to connect with consumers.”

This past quarter, Smaato found a subtle year-over-year shift in Q3 away from the mobile web in favour of apps. This shift could come as a result of publishers directing users to apps to avoid ad-blocking software, which is primarily a mobile web issue. Additional findings in the report include:

The operating system with the strongest growth continues to be Android, with supply and spending soaring by 67% during Q315 from the year before.

Larger ad formats result in higher eCPM (cost per 1,000 clicks). While traditional banners (320x50) are still growing, their rate of growth is dropping in favor of larger sizes like the medium rectangle (300x250) - up 85% - and the interstitial ad (320x480) - which grew 77%.

Rich media continues to generate higher and higher revenues for publishers and app developers - now generating 116% higher revenues than image-based ads.

Smaato serves up to 6 billion ads each day, across 800 million unique monthly mobile users around the world, and works with 90,000 mobile app developers and publishers. The Global Trends in Mobile Programmatic Report reflects the detailed activity and trends that have developed over the third quarter of 2015 across Smaato’s broad, global base of publishers, advertisers and users.

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Download the report

Brands optimising apps for mobile see more sales

Source: Criteo website, Q3 2015 State Of Mobile Commerce report

Criteo, the performance marketing technology company, has released its Q3 2015 State of Mobile Commerce report. This quarterly analysis of industry-wide trends arms marketers with essential mobile commerce intelligence for engaging consumers and boosting sales. Criteo’s comprehensive analysis of 1.4 billion online transactions reveals that 50% of purchases worldwide, now involve multiple devices throughout the consumer buying journey.

Southeast Asia also ranked high on the list, with a 45% conversion rate to sales from their mobile devices, up from 27% in the previous quarter. More than half (54%) of the traffic was also generated from mobile devices. Indonesia topped the list in Southeast Asia, with a 56% conversion to sales.

Criteo’s research shows that early investment in apps is also generating significant payback for e-commerce companies that prioritised this platform. In the retail category, brands that make their app experience a priority generate nearly 60% of mobile revenue from the app, up from 50% in Q2, and heavily outperforming desktops. For travel brands that make their apps a priority, about 50% of mobile revenue comes from the app.

“We continue to see the rise of mobile commerce in a cross-device world. Advertising strategies now need to include mobile at the centre if companies want to engage today’s savvy consumer. Marketers need to pay close attention to the consumer’s purchasing journey if they want to attract buyers and maximise sales,” said Jonathan Wolf, Chief Product Officer, Criteo.

“Southeast Asia continues to be one of our fastest growing regions for e- and m-commerce,” said Yuko Saito, Managing Director, Criteo Southeast Asia. “Southeast Asia now ranks much higher above the global average of 35%, and sits in the same company as advanced mobile countries like Japan and the UK.”

“It is clear that customers are now extremely savvy and are open to browsing and buying on their mobile devices, and this is not just limited to mature markets. Mobile optimisation is now a must-have, not nice-to-have for brands, and we see apps as the next growth driver and a key area of focus for marketers,” said Saito.

Consumers are browsing and buying on all devices—laptops, tablets and smartphones. For brands to succeed, they need to invest in mobile and allocate digital spend strategically:

· For purchases completed on laptops and desktops, 39% of buyers use at least one additional device during the shopping process.

· On mobile, 43% of smartphone buyers and 47% of tablet buyers use an additional device.

· Cross-device purchasers are 20% more likely to use their mobile device to complete a transaction.

Ensuring that the app experience is seamless, intuitive and engaging is central to boosting engagement and conversions:

· For retailers who have prioritised their app experience, 58% of all mobile revenue is generated through the app; travel is at 49%.

· Apps convert at a rate of 3.7 times higher than mobile browsers and two times more than desktop in terms of adding to basket and buying.

Consumers are choosing smartphones as the preferred shopping device more frequently. While all devices and channels should be optimised, smartphones are a key vehicle for brands:

· Smartphones generate 56% of mobile transactions and drive 64% of mobile purchases for top quartile retailers.

· Smartphone conversion rate is two times better for top quartile retailers than average retailers.

Mobile commerce activity is growing worldwide with Japan and South Korea seeing some of the highest volumes of e-commerce transactions. Global brands need to be tuned into how different consumer segments behave in order to deliver the best cross-device and mobile experiences:

· Mobile commerce now represents 35% of e-commerce transactions globally. Mobile transactions in Southeast Asia now account for 45% of all e-commerce transactions (up from 27% in the previous quarter), with Indonesia at 56%, and Taiwan at 38%. 

· Cross-device purchasing is represented by 50% of e-commerce transactions worldwide.

Interested?

Download the Criteo Q3 2015 State Of Mobile Commerce report

Read the TechTrade Asia blog post on the Criteo Q2 2015 State of Mobile Commerce report