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

This study examines the impact of COVID-19 sentiment on office building rents and vacancy rates in China with a index constructed based Baidu search queries COVID-19-related keywords. We analyzed data buildings economic from 2013 Q3 to 2022 Q2 seven major Chinese cities two-stage Error Correction Model framework. found that heightened level significantly adversely affects market. Specifically, decrease more than 8% if city is exposed an increase one unit for entire quarter. The interaction terms model further reveals has substantial where higher, reflecting asymmetric effect. findings here support fear hypothesis. suggest investors’ resulted deterioration rents, reinforcing role pricing buildings. investors should consider investor sentiment, particularly their decision-making.