France sells off state property

France will sell off 1,700 properties, including a magnificent chateau on the shores of Lake Geneva, in its latest cost-cutting effort, the budget ministry said last Wednesday.

This latest sale of French state property, part of a programme that began in 2005, will see mostly office buildings, housing blocks and military barracks up for grabs.

But there are a few gems such as a splendid Haute-Savoie chateau with its own private dock on the shores of Lake Geneva and a 1920 luxury Paris villa located in the chic 7th district, not far from the Eiffel Tower.

The property sell-off will take place over the next three years and full details of the assets will be released on a website for potential buyers to browse.

Most of the buildings and land are located in the French provinces, with some even in overseas departments, part of a massive property portfolio that the state could barely keep track of.

"The state now has a clear picture of what it owns," said budget minister François Barouin.

"Our goal is to manage a smaller property portfolio that is better suited to the state's needs, cheaper in terms of public finances and better maintained," said the minister.

A budget ministry official said the properties will be sold at market value, but no figure was released on the potential influx in state coffers from the sell-off.

Since 2005, sales of state property have generated more than three billion euros in revenue. Most of the buyers have been local governments which get priority and real estate investors.

Barouin said the state will sell off buildings that are no longer useful instead of allowing them to become dilapidated.

For instance, a huge parking garage located in southeast Paris will be shut down and sold off next year after the state decided to outsource maintenance work on the government's fleet of cars.

The French government's property sell-off has raised hackles however following reports that some buyers were picking up buildings for a song and re-selling them for a hefty price.

The Cour des Comptes accounting office noted in its 2009 report that 10 transactions between 2005 and 2007 worth €84.2 million were later sold, with buyers pocketing a cool €42 million.

The state property managers have since 2008 introduced a clause in sale contracts specifying that the government will get part of the profit if the building is sold within two years.

Part of the revenues from property sales is used to fund new construction projects or major restoration work, but about 15 percent goes to reducing the government's debt.

Barouin said he hoped that this percentage will increase in the coming years.