The state remains a poor owner when it comes to managing its real estate

During his recent press conference, Emmanuel Macron declared himself guilty “access to housing for young people” about which “we haven’t made enough progress”. It is clear that the management of public properties is another point where the President, like all administrative bodies and communities, still has considerable room for improvement. The state is quick to establish rules that are sometimes very restrictive for private owners, often forgetting to apply the rules of common sense and proper management.

A few months ago, the Court of Auditors outlined a rather strict assessment of this issue. (see document below). “The state’s property management with its real estate assets must be subject to deep reform to overcome the investment wall facing it and ensure compliance with standards, climate change preparation and the necessary rationalization of its 192,000 buildings.”emphasized its first president Pierre Moscovici. “The state, as a manager of its real estate, does not think explains lawyer Aubry d’Argenlieu, a partner at Fairway, a real estate specialist. For him, it’s just a source of funding through the sale of assets.”

State land

Indeed, we hear that every year there are big sales, such as this Ministry of Culture building sold for 65 million in 2023 or this 600 million euros in total sales recorded in 2022, but this does not allow us to determine whether it is done wisely. “In its time, France Domaine has achieved several big moves, such as the sale of Météo France headquarters to Russia, before giving way to the state estates department, underlines Aubry d’Argenlieu. It’s a great platform for governance, but basically the officials dealing with these issues are not real estate specialists, these properties remain the property of various ministries and we still have the same financial difficulties to preserve an aging heritage.”

The Court of Auditors itself points out that the procedure of the State Directorate of Real Estate “failed to create a professional sector capable of fully embracing real estate challenges” and “The current organization has clearly reached its limits“. However, the challenges to be faced are enormous, especially when it comes to energy renovations, and the state is anything but exemplary in this regard. So how to get out of this? The solution could be through state-owned real estate companies that would managed, with the tenants then becoming the ministries, a solution also recommended by the Court of Auditors and subsequently considered by the Minister for Public Accounts, Thomas Cazenave.

Less square meters

“It would make it possible to increase the responsibility of the ministries, which would take up less square meters, and we would get out of this situation where everyone is jealously guarding their real estate, believes Aubry d’Argenlieu. There would certainly be problems with the transfer of assets, questions about transfer taxes and capital gains, but that would really allow us to put our minds together and manage this legacy as best we can.” And the lawyer already envisions the return of public-private partnerships for some operations or state pension funds that would invest in public real estate.

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