Opposition parties rounded on Belgium's finance minister Didier Reynders when he presented plans at the weekend to sell off EUR 500 mln worth of government buildings. The sale has to be completed before the end of the year to balance the budget, Reynders insisted.

'You must stop immediately with the sale of our property assets,' Servais Verherstraeten of the Christian Democrat CD&V demanded in parliament. He said the Belgian audit agency has sharply criticised previous sales of government buildings for being over-hasty and not raising enough money. 'It is clear that it is difficult to negotiate [a good price] when you have a knife at your throat,' Verherstraeten said.

The minister's revised plan call for the buildings to be sold quickly and leased back to the federal government. He was forced to adopt this approach after the Council of State shot down the original scheme to set up a new closed-ended real estate investment company (Sicafi), in a joint venture with property company Cofinimmo, to manage the properties.

The scheme was suspended after two other real estate companies. Axa Belgium and Befimmo, mounted legal action to contest the decision to appoint Cofinimmo.

The Belgian government has had great difficult over the budget and it has been reported that government departments have been instructed to delay paying suppliers until the next book year. Dutch financial daily Het Financieele Dagblad said the cabinet is now considering adding the Belgian embassy in Tokyo, worth EUR 400 mln, to the sale.

Separately, Cofinimmo is said to be considering its first international expansion by buying retirement homes in the Netherlands, France, Germany and Luxembourg, according to researchers at merchant bank Kempen & Co. Retirement homes account for 5% of Cofinimmo's total property investments and the company is said to be planning to raise this to 10% by the end of 2007.

At the end of November, Cofinimmo posted a nine-months net profit of EUR 86.6 mln, up from EUR 62.163 mln a year earlier. Despite the setback over the Sicafi, Cofinimmo continued to express confidence that the government decision would stand and the company said in mid October that it was pressing ahead with its preparations to purchase the buildings before the end of 2006.