Operating conditions and the investment outlook in the Asia Pacific region shifted dramatically over the first quarter. The market had severe restrictions imposed on it to bring the public health crisis of COVID-19 under control, and governments and central banks announced very large support packages to offset the costs of these restrictions. The current projections are for a sharp, but short-lived contraction in economic activity, concentrated in the first half of this year, with a resultant recovery in the second half of 2020 and rebound in 2021. The unknown part of this outlook is the effect any COVID-19 reoccurrence may have, and how disruptive that could be.
In this environment, investors will likely seek an entry discount in order to price that increased uncertainty. For the time being, most property sellers are waiting to see how this situation evolves. Their holding power will likely withstand most of the pressure from the occupational markets, and fortunately, banks are being supportive and unlikely to cause any forced sales.
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