New Defense Properties lot

ROME - The defense real estate assets, made up of residential buildings (18 thousand units) and non-residential buildings (barracks, depots, sports facilities, parks, warehouses, lighthouses on the way to disuse in view of the reform of the military conscription) with an overall value estimated very conservatively between 29 and 15 billion euros, are destined to flesh out the real estate divestment program also for the years 2006-2008. A maxi-program short of real estate units to be disposed of after the sale of the residential properties of social security institutions (through securitization) and the offices of the Mef (Public Real Estate Fund with rent-back).
At stake is even the one million apartments of the former autonomous public housing institutes (Iacp), estimated in total at 90 billion euros: the proceeds from the sale of these accommodations to tenants sine titulo, who do not meet the requirements to occupy them, cannot flow directly into the state coffers because the ownership of the properties has been transferred to the Regions and Municipalities. It remains to be seen whether the proceeds from ex-Iacp sales will be used to build new council houses or will partly contribute to reducing the debt of local authorities, as has happened in the United Kingdom.
The sale of properties in itself is nothing new under the sun of the public panorama. In recent years, through the advance of collections with securitizations and FIPs, these divestments have contributed significantly to the reduction of net debt. Starting from 2006, and with the approval of Eurostat, the proceeds from the disposal of real estate properties - as anticipated by the Minister of Economy Domenico Siniscalco - will be diverted solely to the reduction of the debt/GDP and channeled into the sinking fund for the repurchase of government bonds. A law to this effect is expected in the Budget. However, securitizations can only be achieved on easily sellable real estate properties: residential with tenants first and foremost. Defense residential properties and former IACP properties are therefore in pole position for the next securitisations: 60% of the properties planned for Scip3 (4000-5000 apartments) are made up of Defense residential units, no longer useful for institutional purposes, occupied without title. As for non-residential buildings, a tranche of former barracks and other buildings (240) has already been put up for sale "for the modernization of the armed forces", as pointed out yesterday by the Ministry of Economy. The Cassa Depositi e Prestiti will advance the entire collection to Defense this year for an amount between 954 and 1,357 million euros, by virtue of a guarantee of last resort recognized by the State to CDP.
The cost/revenue analysis for Defense reinforces the arguments promoted by the Mef in favor of residential divestments. Many tenants pay low rents (there are cases of 400 square meter villas with 117 euros rent per month). The income from rentals, on an annual basis, is around 18 million euros when instead for maintenance costs the Defense annually writes a check of over 200 million euros.
But it is not just a matter of balancing the public accounts: if it is true that many tenants of these two categories of properties, sine titulo (retired soldiers, widows of soldiers, families in public housing with high incomes) are ready to buy the house in which they have lived for a long time at a discount - even if they pay very low rents - then real estate disposals will be considered by the Berlusconi Government as an asset to be played in the electoral campaign. Over a million voters would be ready to buy these properties for sale, according to estimates circulated in recent days in the corridors of Palazzo Chigi and landed on the Prime Minister's desk.
The numbers
The figures of the dispute over residential defense properties 13.1 BILLION - Value of buildings, residential and non-residential (State Heritage spa)
800-1,000 million - Value of four thousand alienable residential properties
18,084 - Number of alienable residential properties The other figures: 16,500 alienable residential properties (e)
240 non-residential properties being sold (f)
2,650 empty residential (e)
2,648 residential buildings in a state of abandonment (e)
3,811 residential buildings not located in securitized and alienable infrastructures (b)
1,500 non-alienable residential homes because they are inside military infrastructures (e)
5,500-4,500 residential homes occupied 'sine titulo' (c)(e)
40 thousand new residential buildings needed following the draft reform (d)
The tenants
1,500 tenants (out of a total of 4 thousand) 'sine titulo' who do not want or cannot buy (c)
Notes: (a) Patrimonio dello Stato spa (b) according to the Ministry of Defence, without specifying whether empty, occupied, in a state of abandonment (c) according to the coordinator of Casadiritto of the armed forces (d) according to the Ministry of Defense (e) according to the National Committee for military families for the home (f) estimated value between 954 and 1357 million euros

source: Real Estate Observatory