The COVID-19 Sentiment and Office Markets: Evidence from China

The COVID-19 Sentiment and Office Markets: Evidence from China

Blog Article

This study examines the impact of COVID-19 sentiment on office building rents and vacancy rates in China with a COVID-19 sentiment index constructed based on Baidu search queries on COVID-19-related keywords.We analyzed the data of office buildings and economic data from 2013 Q3 to 2022 Q2 in seven major Chinese cities with a two-stage Error Correction Model framework.We found that a heightened level of COVID-19 sentiment significantly and adversely affects the Chinese office buildings market.

Specifically, office building rents decrease more read more than 8% if a city is exposed to an increase of one unit of COVID-19 sentiment for an entire quarter.The interaction terms model further reveals that the COVID-19 sentiment has a more substantial impact on office building rents where office vacancy is higher, reflecting an asymmetric effect.The findings here support the fear sentiment hypothesis.

The findings suggest that a heightened level of investors’ COVID-19 sentiment resulted in a deterioration of office rents, reinforcing the role of investors’ sentiment in the pricing of office buildings.The findings suggest that investors should consider investor biomat for sale sentiment, particularly COVID-19 sentiment, in their decision-making.