France to continue its energetic sales of state-owned property

Speaking to French weekly Les Echos on Wednesday, Budget Minister Bernard Cazeneuve expressed his hope to continue the strong pace of sales of state-owned property for the coming three years. 547 million euros in revenue from such sales was realized in 2012. “Between 2007 and 2011, the state realized about 4 billion euros in sales. This program has contributed about 15% of the debt reduction” that France has realized in the last years as we already explained in March 2012.

 Mr. Cazeneuve hopes for another 540 million euros in sales in 2013. But, he admits, the easiest sales have already been realized, and to achieve this goal “we will have to carry out more complex operations.”

The goals of the sell-off are wider than simply debt-reduction. The government’s primary objective is to save on operating costs, streamlining the administrative needs and pooling services regionally. Thus in compliment to its sales, the French state acquired 400 million euros in real estate last year, and expects the price of new investments to roughly equal the revenue from sales in 2013, with 543 million euros in .  to be equivalent to the number of sales in  the real estate acquisitions of the State necessary for these groups, have thus amounted to 400 million euros last year. Investments will also roughly equivalent to sales this year. The State is also mobilizing to provide substantial incentives for new housing construction where it is most needed.

As a tenant, the French state is also ready to realize savings. Mr. Cazeneuve intends to pursue a “strategy of renegotiating leases,” opening its tenancy needs to competitive bidding and imposing ceilings on the rent commitments of state agencies. Mr. Cazeneuve shared that the state has already shaved 25% off of the 117 million euros it pays in rent in Paris/Ile-de-France alone, by renegotiating the terms of 48 existing leases in the region.