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State-owned property: Financial savings achieved on government-owned real estate assets

Potential Financial Benefits from State-Owned Assets

State auditors are urging the government to take action following the revelation of large cash...
State auditors are urging the government to take action following the revelation of large cash transactions.

Saving Some Green in Bavaria: State-Owned Properties under the Microscope

Potential Financial Benefits Arising from Publicly Held Real Estate Assets - State-owned property: Financial savings achieved on government-owned real estate assets

The Bavarian State Audit Office (ORH) has voiced concerns over the management and maintenance costs of state-owned properties, calling for action from the government. In a recent report to the Landtag, the ORH recommended a thorough examination of the potential cost savings that could be achieved.

Despite the Ministry of Construction's assertion that individual departments are responsible for cost control, the ORH insists on a collective, cross-departmental approach. With management and maintenance costs projected at an astronomical 2.6 billion euros for the years 2024/2025, the ORH suggests that saving a mere 10% through effective cost control could yield annual savings of 130 million euros. However, the administration must first quantify the specific cost savings and efforts required.

Green Party budget spokesperson, Claudia Köhler, has criticized the lack of progress on the matter, accusing the state government of failing to implement a concrete action plan. The ORH itself had previously noted the absence of cross-departmental cost control in its 2024 annual report. The Ministry of Construction has defended its cost control methods by citing budget funds and an existing framework for a budget settlement. But, the ORH rebuffs this, arguing that budget funds do not replace comprehensive, informative cost analysis.

While there are no specific details regarding the Bavarian State Government's immediate plans to achieve cost savings, broader trends and initiatives could provide a roadmap for savings opportunities in real estate across Germany. Adopting sustainable building materials, investing in energy-efficient upgrades, and streamlining property management processes could all contribute to potential cost savings in state-owned properties.

  • Budget Control
  • Property Management
  • Cost Savings Opportunities
  • Bavarian State Government
  • Sustainable Building Materials
  • Energy-Efficient Upgrades
  • Streamlined Management
  1. Sustainable Building Materials and Modular Construction: The adoption of sustainable building materials and modular construction methods could lead to long-term cost savings for property management.
  2. State Subsidies and Energy Efficiency: Government subsidies for energy-efficient upgrades could help reduce operational costs, leading to potential savings. The focus on self-consumption and investment cost subsidies for renewable energy installations might also indirectly benefit public properties.
  3. Taxation and Property Management: The relatively low transfer tax rate of 3.5% and the absence of a national property tax help the Bavarian government manage transaction costs for state-owned properties.
  4. The Bavarian State Government could explore the implementation of a comprehensive employment policy across all departments responsible for state-owned properties, with the goal of streamlining property management processes and achieving cost savings.
  5. To further finance the proposed initiatives for cost savings, the Bavarian State Government could consider developing a business model that includes revenue streams from rental or leasing of state-owned properties, creating a consistent cash flow to supplement maintenance and management expenses.

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