Paris Under The Hammer

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Shopping for that cozy central Paris pied-à-terre? Consider the ad in the daily Le Monde: 18th-century townhouse, 4,137 sq m of floor space, huge courtyard, lush 2,400-sq-m garden — all tucked away in the city's ritzy seventh arrondissement. A perfect nest for your (very extended) family. Who'd part with such a jewel? The divestment-minded French state, that's who.

"This is part of a major process to renew and rationalize France's real estate holdings," says an adviser to Reform and Budget Minister Jean-François Copé. Since June 2005, France has been off-loading odd or uneconomic offices from its €15 billion portfolio — like the 1770-built Hôtel Kinsky, advertised in Le Monde, that houses 138 Culture Ministry employees who are off to new premises. The plan has boosted France's annual sales of state properties from €160 million to €635 million last year, a pace expected to settle down at €500 million for the foreseeable future.

With 15% of that money credited to the public debt, state bookkeepers will applaud, but the French attachment to the nation's patrimoine has sparked "a deeper, wider wave of opposition to this than to any of our other reforms." Is the resistance just misguided nostalgia? Properties the size of the Hôtel Kinsky in central Paris are rare, "but its interior is neither historic nor stately," sniffs Thierry Cardot, whose Luxury Observatory researches upmarket markets.

He reckons the shack may go for under half its valuation of €57 million, but notes "better opportunities will come as these sales progress." Apartment hunters, take note.